Le-el D. Sinai

Firm/Organization: Reed Smith LLP

Blogs: FinTech Update, Ship Law Log, Technology Law Dispatch

Latest Articles

U.S. Securities and Exchange Commission Publishes Joint Statement on Broker-Dealer Custody of Digital Asset Securities

July 10, 2019

On July 8, 2019 the U.S. Securities and Exchange Commission (the “SEC”) and the Financial Industry Regulatory Authority (“FINRA”) (both, the “Regulators”) published a Public Statement titled, “Joint Staff Statement on Broker-Dealer Custody of Digital Asset Securities” (the “Joint Statement”). The Joint Statement follows many months of discussions with certain digital asset securities industry participants seeking registration with the SEC as broker-dealers. The Joint Statement noted the Regulators’ discussions with these industry participants have contributed…

FinTech Update

Financial Action Task Force Publishes Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers

By Herbert F. Kozlov & Le-el D. Sinai

June 25, 2019

On June 21, 2019 the Financial Action Task Force (the “FATF”), published its long-awaited Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers (the “Guidance”). The FATF is tasked with setting standards and promoting effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. U.S. Treasury Secretary Steven Mnuchin noted in his remarks that the…

FinTech Update

FINRA Issues First Litigated Enforcement Action Against Crowdfunding Portal

By Herbert F. Kozlov, C. Neil Gray, Le-el D. Sinai & Daphne Lambadariou

June 21, 2019

On June 5, 2019, a Financial Industry Regulatory Authority (FINRA) panel handed down its first enforcement action against a funding portal. DreamFunded, a crowdfunding platform, was banned from FINRA membership, and Manny Fernandez, DreamFunded’s CEO, was barred from association with any FINRA funding portal member. DreamFunded and Fernandez were further ordered to cover $15,900 in hearing costs. Although FINRA previously settled with another crowdfunding website in 2016, the panel’s 148-page DreamFunded decision marks the first…

FinTech Update

CFTC Technology Advisory Committee Discusses Automated Trading, Cryptocurrency, Cybersecurity, and Blockchain Technology

By Herbert F. Kozlov, Peter Malyshev & Le-el D. Sinai

March 29, 2019

The Commodity Futures Trading Commission (“CFTC”) held a public meeting of the Technology Advisory Committee (“TAC”) on March 27, 2019. The TAC is sponsored by CFTC Commissioner Brian Quintenz and Daniel Gorfine, Director of LabCFTC, is the Designated Federal Officer. The TAC, comprised of industry business, technology, and legal minds, meets periodically to discuss pressing technology-related issues affecting the commodity and derivative markets and regulation. This meeting of the TAC consisted of four panels focusing…

Technology Law Dispatch

Risks and considerations when storing crypto-assets

By Herbert Kozlov, Anthony Diana, Jeffrey D. Silberman & Le-el D. Sinai

February 14, 2019

Following the sudden death of its co-founder and CEO, Gerald Cotten, in December 2018, Quadriga, Canada’s largest cryptocurrency exchange, is unable to gain access to about $145 million of bitcoin and other digital assets. Quadriga reports that Cotton stored the digital assets in a “cold wallet” on his encrypted laptop and repeated attempts by his widow to gain access to the laptop have proven unsuccessful. Quadriga has been forced to stop trading on its platform,…

FinTech Update

Lessons Learned – The Importance of Governance and Regulatory Oversight in Storing Crypto Assets

By Herbert F. Kozlov, Anthony Diana, Jeffrey D. Silberman & Le-el D. Sinai

February 6, 2019

Quadriga “Loses” Keys to Stored Digital Assets Quadriga, Canada’s largest cryptocurrency exchange, is unable to gain access to about $145 million (USD) of bitcoin and other digital assets following the sudden death of Gerald Cotten, its co-founder and CEO, in December 2018. According to Quadriga, Cotten stored those digital assets in a “cold wallet” on his encrypted laptop and repeated attempts by his widow to gain access to the laptop have proved unsuccessful. Additionally, details…

Ship Law Log

Blockchain Boost for the Shipping Industry

By Herbert F. Kozlov & Le-el D. Sinai

January 24, 2019

After several successful trials over the last year, Israel’s largest cargo shipping company, Zim, has implemented a blockchain platform for electronic bills of lading. According to Zim, this technology could replace paper bills of lading and further improve other activities which rely on physical means of transfer. Zim recently conducted several transactions in which bills of lading were transferred to the receiver less than two hours from the vessel’s departure, a process that typically takes…

FinTech Update

The Shipping Industry Receives a Boost from Blockchain

By Herbert F. Kozlov & Le-el D. Sinai

January 23, 2019

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FinTech Update

SEC in First Enforcement Action Against Token Exchange

By C. Neil Gray & Le-el D. Sinai

November 9, 2018

On November 8, 2018, the U.S. Securities and Exchange Commission (the “SEC”) settled its first case against an unregistered cryptocurrency exchange. Zachary Coburn, founder of EtherDelta, agreed to pay $313,000 in disgorgement and interest, along with a civil fine of $75,000, in order to settle SEC allegations that EtherDelta was acting as an unregistered securities exchange.…

FinTech Update

Federal Regulation of Virtual Currency and Digital Tokens: Preemption, Jurisdiction, and Clarity. But will States Push Back?

By Divonne Smoyer & Le-el D. Sinai

October 1, 2018

In September of this year, certain congressmen expressed their intention to preempt state regulation of virtual currency regulation. Rep. Darren Soto (D-Fla.) expressed a need for “partial federal preemption” of state laws and Rep. Warren Davidson (R-Ohio) plans to introduce a bill that may seek federal preemption of state licensing and oversight requirements of virtual currency exchanges. We have seen state push-back on attempts by the federal government to regulate parts of the FinTech space,…

Le-el D. Sinai

U.S. Securities and Exchange Commission Publishes Joint Statement on Broker-Dealer Custody of Digital Asset Securities

Financial Action Task Force Publishes Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers

FINRA Issues First Litigated Enforcement Action Against Crowdfunding Portal

CFTC Technology Advisory Committee Discusses Automated Trading, Cryptocurrency, Cybersecurity, and Blockchain Technology

Risks and considerations when storing crypto-assets

Lessons Learned – The Importance of Governance and Regulatory Oversight in Storing Crypto Assets

Blockchain Boost for the Shipping Industry

The Shipping Industry Receives a Boost from Blockchain

SEC in First Enforcement Action Against Token Exchange

Federal Regulation of Virtual Currency and Digital Tokens: Preemption, Jurisdiction, and Clarity. But will States Push Back?

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