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Global Weekly Fintech Round-up

15 July 2019

15 July 2019

Welcome to this week's global fintech round-up, summarising fintech regulatory developments that have happened around the world along with our Clifford Chance fintech publications and upcoming events.

Details of these and previous developments can also be found on our Fintech Topic Guide on the Clifford Chance Financial Markets Toolkit.

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CLIFFORD CHANCE PUBLICATIONS AND MATERIALS

Talking Tech article – Bringing human smarts to artificial intelligence – a reminder of the risk of bias for underwriters in Insurtech

Clifford Chance briefing – Cyber security - what regulators are saying around the world

SPOTLIGHT

Facebook's Libra currency - will unexpected tax complications scare off users?

Each time consumers transact in Facebook's proposed new cryptocurrency Libra, they’ll be making a capital gain or loss as Libra's value will track a basket of fluctuating fiat currencies. In most countries gains will be taxable, meaning consumers will have to file a detailed tax return and pay any tax due. This seems to us to be a significant barrier to wide adoption which will need to be addressed ahead of launch.

GLOBAL LEGAL AND REGULATORY UPDATES

International

Americas

Canada:       

US:  

  • (11 Jul 2019) US President Donald Trump tweets on Facebook's Libra project, stating that Facebook will require a new banking charter and will be subject to banking regulations.
  • (10 Jul 2019) Securities and Exchange Commission (SEC) Regulation A+ approval of blockchain start-up Blockstack's upcoming token offering. This means Blockstack will become the first company with SEC approval to sell registered securities tokens (which function as utility tokens) to the public in the US. | Blockstack press release
  • (10 Jul 2019) Order and default judgment in the case of Commodity Futures Trading Commission (CFTC) v. JOHN DOE 1 aka MORGAN HUNT dba DIAMONDS TRADING INVESTMENT HOUSE, and JOHN DOE 2 aka KIM HECROFT dba FIRST OPTIONS TRADING, in which the US District Court of Northern District of Texas found that defendants engaged in a fraudulent scheme to solicit bitcoin from members of the public to invest in trading products including leveraged or margined foreign currency contracts (forex), binary options, and diamonds. Defendants’ fraudulent actions included impersonating a CFTC investigator and sending forged documents purportedly authored by the CFTC’s General Counsel and bearing the image of the CFTC’s official seal. | Press release.
  • (9 Jul 2019) The Governor of New York and representatives from the Israel Securities Authority, the Bank of Israel and Israel's Capital Markets Insurance and Savings Authority have signed a fintech memorandum of understanding aimed at encouraging fintech innovation in both jurisdictions, providing support to fintech companies and facilitating information exchange | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.
  • (8 Jul 2019) The Financial Industry Regulatory Authority and SEC joint statement on broker-dealer custody of digital asset securities.

APAC

Hong Kong:

  • (5 Jul 2019) The Hong Kong Monetary Authority and the French Autorité de Contrôle Prudentiel et de Résolution have signed a fintech memorandum of understanding aimed at facilitating collaboration on joint innovation projects, exchange of experience and expertise and referral of fintech businesses between the two jurisdictions | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.

Singapore:   

  • (5 Jul 2019) Inland Revenue Authority of Singapore consultation on draft guidance on the Goods and Services Tax treatment of digital payment tokens.
  • (28 Jun 2019) Monetary Authority of Singapore announces it intends to issue up to five new digital bank licences which will be open to non-bank players. | Press release.
Europe

EU:  

France:          

  • (5 Jul 2019) The Hong Kong Monetary Authority and the French Autorité de Contrôle Prudentiel et de Résolution (ACPR) have signed a fintech memorandum of understanding aimed at facilitating collaboration on joint innovation projects, exchange of experience and expertise and referral of fintech businesses between the two jurisdictions | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.
  • (4 Jul 2019) ACPR report (in French) setting out responses to its consultation on its discussion paper on artificial intelligence and the challenges posed to the financial sector.

Germany:          

  • (9 Jul 2019) Deutsche Bundesbank Executive Board Member Burkhard Balz speech on digital transformation from a central bank perspective.

Kazakhstan:          

  • (24 Jun 2019) The Astana Financial Services Authority has introduced a regulatory framework for loan and investment-based crowdfunding platforms. | Press release.

Turkey:          

  • (9 Jul 2019) Government 2019-2023 development plan (in Turkish), which includes, amongst other things, the intention to develop a blockchain-based central bank issued digital currency.

 

UK:          

  • (11 Jul 2019) Bank of England governor Mark Carney statement at the Financial Stability press conference, in which he comments on Facebook's Libra project.
Middle East

Israel:

  • (9 Jul 2019) The Governor of New York and representatives from the Israel Securities Authority, the Bank of Israel and Israel's Capital Markets Insurance and Savings Authority have signed a fintech memorandum of understanding aimed at encouraging fintech innovation in both jurisdictions, providing support to fintech companies and facilitating information exchange | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.
CLIFFORD CHANCE EVENTS       

London – CBI Conference Series: Cyber Security (12 Sep 2019)

Clifford Chance is delighted to be hosting CBI's Cyber Security Conference 2019. The conference brings together business leaders and the UK’s foremost industry experts on cyber security. Through in-depth presentations, panel discussions and breakout sessions, our experts will provide the cutting-edge insight and practical solutions to enable you to plan your strategy with confidence. | For more information and to register see the Talking Tech event webpage.

London – Sibos Debrief – Payments Industry Forum (2 Oct 2019)

Clifford Chance will be hosting a payments industry forum event following Sibos 2019, which takes place in London on 23-26 Sep this year. Clifford Chance Partner Simon Gleeson will be moderating The future of banking panel and other members of our market leading payments services team will be at Sibos 2019, with ears open to pick up the very latest market, regulatory and legal issues in the banking, payments and fintech sectors. The following week, on 2 Oct 2019, please join us for a payments industry forum event, where we will update you on what we learned. | For more information and to RSVP see the Talking Tech event webpage.

This publication does not necessarily deal with every important topic nor cover every aspect of the topics with which it deals. It is not designed to provide legal or other advice. Clifford Chance is not responsible for third party content. Please note that English language translations may not be available for some content

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