On August 8, 2022, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the imposition of sanctions on the decentralized digital asset mixer Tornado Cash. The action marks the first time OFAC has targeted an on-chain decentralized protocol. To date, OFAC has not issued any guidance specific to decentralized finance (DeFi)

On July 21, 2022, the SEC filed insider trading charges in federal court against a former Coinbase product manager and two others for trading ahead of multiple announcements that certain crypto assets would be made available for trading on the platform.[1] The SEC alleged that the defendants traded ahead of listing announcements for at

On June 7, 2022, Senator Cynthia Lummis (R-WY) and Senator Kirsten Gillibrand (D-NY) introduced the Responsible Financial Innovation Act (RFIA). This highly anticipated legislation is the first attempt at developing a comprehensive regulatory framework for cryptocurrency and digital assets.
The RFIA builds off proposals introduced this Congress and includes a number of provisions related

On March 7, 2022, the Financial Crimes Enforcement Network (FinCEN) of the US Department of the Treasury published guidance (Guidance) for US financial institutions warning about: (1) efforts of foreign actors to evade expanding US economic sanctions and trade restrictions related to the Russian Federation and Belarus and (2) increased risk of malicious cyber-attacks and

On November 1, 2021, the President’s Working Group on Financial Markets (PWG), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) issued a joint report that, among other things, calls on Congress to adopt legislation to enable federal oversight of stablecoin issuers, custodial wallet providers that hold stablecoins,

The House Rules Committee recently released the latest version of HR 5376, the Build Back Better Act. This proposal would amend Internal Revenue Code section 1091 (“loss from wash sales of stock or securities”) to apply to a much broader range of assets, including foreign currency, commodities, and digital assets, in addition to stocks and

On October 15, 2021, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued anticipated Sanctions Compliance Guidance for the Virtual Currency Industry and updated two related Frequently Asked Questions (FAQs 559 and 646). OFAC has published industry-specific guidance for only a handful of other industries in the past two decades;

On May 20, 2021, the U.S. Department of the Treasury (“Treasury”) released the American Families Plan Tax Compliance Agenda, a report detailing the Biden administration’s proposed measures to raise $700 billion in additional tax revenue over the next decade through the Internal Revenue Service (“IRS”) and its enforcement-related efforts (the “Report”).  Additional detail about these

On March 19, 2021, the Financial Action Task Force (FATF), the global anti-money laundering standards-setting body, released draft guidance to clarify and supplement its 2019 guidance on a Risk-Based-Approach (RBA) to Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs). While FATF’s guidance is not technically binding on member countries, it is broadly followed by

On February 18, 2021, the US Department of the Treasury’s Office of Foreign Assets control (OFAC) announced a $507,375 settlement with BitPay, Inc. (BitPay). This civil settlement resolved apparent violations of multiple sanctions programs related to digital currency transactions, and is the second OFAC enforcement case brought against a business in the blockchain industry. This

On December 30, 2020, the US Department of the Treasury’s Office of Foreign Assets control (OFAC) announced a $98,380 settlement with BitGo, Inc. (BitGo). This civil settlement, regarding apparent violations of multiple sanctions programs related to digital currency transactions, is the first published OFAC enforcement action against a business in the blockchain industry.
BitGo, based

As 2020 finally comes to a close, it is time to consider year-end tax planning. One bright spot this year has been the performance of cryptocurrencies. Bitcoin, in particular, is trading at or near all time highs, considerably above its previous peak at the end of 2017. Other cryptocurrencies, like Ether, have also had considerable

On October 23, 2020, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve Board published a joint notice of proposed rulemaking inviting comments on proposed modifications to regulations implementing the Bank Secrecy Act (BSA). First, the agencies propose to lower the monetary threshold contained in the so-called “recordkeeping rule”

The OECD released a report titled Taxing Virtual Currencies: An Overview of Tax Treatments and Emerging Tax Policy Issues on October 12. The report, which was prepared and endorsed by the 137 members of the OECD’s Inclusive Framework on Base Erosion and Profits Shifting, provides a comprehensive analysis of the approaches and policy gaps across