Cleary FinTech Update

The Latest Insights Into Innovation in Financial Services

On July 31st, the Office of the Comptroller of the Currency (“OCC”) announced that it would begin accepting applications for a special purpose national bank charter (“FinTech Charter”) from nonbank financial technology companies that offer bank products and services, meet the OCC’s chartering requirements (the “FinTech Charter Policy Statement”) and adhere to the OCC’s supplemental Licensing Manual (the “Comptroller’s Manual Supplement” or the “Supplement”).  Hours earlier, the Treasury Department released its…
On July 31st, the Treasury Department (“Treasury”) released its fourth and final report in response to President Trump’s Executive Order 13772.  The report, entitled “A Financial System That Creates Economic Opportunities: Nonbank Financials, Fintech, and Innovation” (the “Report”), only briefly addresses distributed ledger technologies, blockchain and digital assets, but takes broad aim at perceived regulatory challenges to innovation.  The Report argues for a significant rethinking of state and federal regulation across data…
Today, Treasury released its long-awaited FinTech report entitled “A Financial System That Creates Economic Opportunities: Nonbank Financials, Fintech, and Innovation”. While the report provided only a very truncated discussion of distributed ledger technologies, blockchain, and digital assets, it discussed at length other key innovation and technology issues that are impacting the market for financial services. While DLT and digital assets appropriately garner many headlines, the innovative potential of new technologies for how financial services are…
On Wednesday, July 25th, Pamela Marcogliese, a partner at Cleary Gottlieb,  moderated a panel for Women in Derivatives on the role of artificial intelligence (“AI”) and machine learning in the financial industry featuring experts such as Dr. Sherry Marcus, Managing Director and Co-Head of Data Science Core at BlackRock, Asita Anche, Managing Director, Head of Systematic Market Making, Risk Centralization & Data Science at Barclays, Kristina Fan, CEO & Founder at 7 Chord (a FinTech…
The New York Department of Financial Services (“NYDFS”) recently announced approval of significant new activities for FinTech-oriented businesses. Over the past week, NYDFS has granted the following approvals: Additional virtual currencies available for trading through Paxos Trust Company LLC (formerly known as itBit Trust Company), a NY-chartered trust company; and Approval of BitLicenses for Xapo, Inc. and Square, Inc. which would authorize them to offer custody and exchange services, respectively, for Bitcoin to residents of…
The New York Department of Financial Services (“NYDFS”) recently announced approval of significant new activities for FinTech-oriented businesses. Over the past week, NYDFS has granted the following approvals: Additional virtual currencies available for trading through Paxos Trust Company LLC (formerly known as itBit Trust Company), a NY-chartered trust company; and Approval of BitLicenses for Xapo, Inc. and Square, Inc. which would authorize them to offer custody and exchange services, respectively, for Bitcoin to residents of…
On Thursday, June 14th, the SEC Director of Corporation Finance, William Hinman, stated his view that current secondary market trades of Ether are not now securities transactions as part of a speech on the treatment of digital assets under the securities laws.  While he expressly set aside the question of whether the capital-raising that initially accompanied the sale of Ether in 2014 was a securities offering, he confirmed previous suggestions that Ether is a prime…
On Thursday, June 14th, the SEC Director of Corporation Finance, William Hinman, stated his view that current secondary market trades of Ether are not now securities transactions as part of a speech on the treatment of digital assets under the securities laws.  While he expressly set aside the question of whether the capital-raising that initially accompanied the sale of Ether in 2014 was a securities offering, he confirmed previous suggestions that Ether is a prime…
This week the New York Department of Financial Services (“NYDFS”) announced approval of significant new activities for its two licensed FinTech-oriented state trust companies, Gemini Trust Company LLC and Paxos Trust Company LLC (formerly known as itBit Trust Company), engaged in blockchain and virtual currency activities.  Significantly, the approved activities demonstrate both the continuing importance of virtual currency trading and the expansion into permissioned blockchain trading and settlement services.  These announcements represent the first substantive…
On April 17, 2018, Cleary Gottlieb hosted a conference in the heart of the City of London to discuss key issues in the FinTech space. The conference was well attended, and a wide range of topics were discussed by industry leaders.  The quality and insight of both our speakers and attendees made our first FinTech Conference in London a very interesting afternoon. Bob Penn, a partner in financial services regulation at Cleary Gottlieb, opened…