Policy Patty Toolkit 

Making the world a little more compliant one toolkit at a time.


FINRA Encourages Firms to Notify FINRA if They Engage in Activities Related to Digital Asset

Posted on July 9, 2018 at 8:00 AM

FINRA issued Regulatory Notice 18-20 (Notice) as part of its monitoring efforts regarding developments in the digital asset marketplace to ascertain the extent of FINRA member involvement related to digital assets. The Notice to encourage each firm to promptly notify FINRA if it, or its associated persons or affiliates, currently engages, or intends to engage, in any activities related to digital assets, such as cryptocurrencies and other virtual coins and tokens. In addition, until July 31, ...

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NY's DFS Authorizes Gemini Trust Company to Provide Additional Virtual Currency Products and Services

Posted on May 14, 2018 at 4:00 PM

NY's Department of Financial Services (DFS) has authorized Gemini Trust Company, LLC to offer the custody services and trading of Zcash, Litecoin and Bitcoin Cash, emerging cryptocurrencies, on its virtual currency exchange based in New York City. Cryptocurrencies are alternative decentralized global digital currencies that provide users with a more secure and efficient means of payment. The DFS issued a trust charter to Gemini in October 2015 to operate a virtual currency exchange through wh...

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Coinbase Compelled by IRS to Provide Customer Information

Posted on February 26, 2018 at 3:20 PM

Cryptocurrency startup Coinbase must provide data on some of its customers to U.S. tax authorities in the coming weeks. In an email sent to around 13,000 customers, Coinbase advised that it must share "only certain limited categories of information" with the Internal Revenue Service (IRS). It appears that this information includes “taxpayer ID, name, birth date, address, and historical transaction records for certain higher-transacting customers during the 2013-2015 period.” The i...

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SEC Charges Former Bitcoin-Denominated Exchange and Operator with Fraud

Posted on February 25, 2018 at 3:10 PM

The SEC charged a former bitcoin-denominated platform and its operator (BitFunder and its founder Jon E. Montroll) with: 1) operating an unregistered securities exchange and defrauding users of that exchange; and 2) making false and misleading statements in connection with an unregistered offering of securities.

BitFunder and Montroll allegedly:

• operated BitFunder as an unregistered online securities exchange;

• defrauded exchange users by misappropriating the...

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DFS Takes Action to Deter Fraud and Manipulation in Virtual Currency Markets

Posted on February 18, 2018 at 2:00 PM

The New York State Department of Financial Services (DFS) issued guidance reminding all virtual currency entities licensed by New York State, including those that hold a money transmitter license, that they must:

• implement measures designed to effectively detect, prevent, and respond to fraud, attempted fraud, and similar wrongdoing; and

• be especially vigilant against efforts at market manipulation.

In sum, the guidance directs virtual currency entities to ad...

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