The Crypto Exchange
Keith Barnett, Kalama Lui-Kwan, Carlin McCrory, Ethan Ostroff
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The digital assets market is ever-expanding, moving from a niche interest to an industry sector that touches many areas of our daily lives. With The Crypto Exchange podcast, attorneys from Troutman Pepper’s FinTech and Payments practice groups will look at the trends, challenges, and legal issues that our clients and others in the industry face daily. From NFTs to Web3, bitcoin to blockchain, fintech to regtech, and payment processing to data processing, we’ll walk you through the federal and state regulatory, legal, and business intricacies of this rapidly evolving industry sector.
Available episodes
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Sep 7, 2023
Analyzing the Treasury's Illicit Finance Risk Assessment of Decentralized Finance
In this episode of _The Crypto Exchange_, Troutman Pepper Partner Ethan Ostroff welcomes his colleagues Mike Lowe and Matt Orso to discuss the U.S. Department of Treasury's Illicit Finance Risk Assessment of Decentralized Finance (DeFi), which assesses how illicit actors are abusing DeFi services, as well as vulnerabilities unique to DeFi services.
With this assessment, the Treasury has signaled its intent to increase focus on the DeFi sector, expecting DeFi market actors to integrate anti-money laundering (AML) and counter-terrorism financing (CFT) compliance into their services.
Ethan, Mike, and Matt take a deep dive into the biggest takeaways from the assessment, including:
* DeFi services often don't comply with the Bank Secrecy Act, as well as AML and CFT regulations.
* Illicit actors use DeFi for money laundering due to the high level of anonymity it offers.
* DeFi services, often small startups, are vulnerable to hacking.
Additionally, the Treasury also posed five questions in the assessment and is seeking public input on those questions. Our attorneys discuss the key points that the Treasury is looking for through the public’s input.
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Aug 29, 2023
Current Landscape of Cryptocurrency Regulation and Enforcement
In this episode of _The Crypto Exchange, _our host Ethan Ostroff joins his colleagues Chris Willis and Trey Smith to discuss the current landscape of cryptocurrency regulation and enforcement. Our team offers insights to the industry about various topics, including:
* Regulation of cryptocurrency at the federal and state level, and what the regulators are targeting;
* The involvement of state attorneys general in cryptocurrency and enforcement;
* Movement on the legislative front, including New York’s Cryptocurrency Regulation, Protection, Transparency, and Oversight Act, and the U.S. House of Representatives Financial Services Committee release of the Digital Asset Market Structure Discussion Draft; and
* What we can expect in the future with regard to cryptocurrency regulation and enforcement.
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Aug 18, 2023
Turning up the Heat – A Look at the FTC's Groundbreaking Fine Against Bankrupt Digital Asset Services Provider Celsius Network LLC
In this episode of _The Crypto Exchange_, Troutman Pepper Partner Ethan Ostroff welcomes his colleagues Kim Phan and Addison Morgan to discuss the recent enforcement actions brought by the Federal Trade Commission (FTC) against Celsius Network and its co-founders. In addition to permanently banning Celsius Network from consumers' assets, the FTC also fined the company a near record-breaking $4.7 billion.
This is a groundbreaking move by the FTC for two reasons. First, it marks the first time that the agency has filed suit against a digital asset-based company. Second, the FTC's request for civil money penalties is predicated on a novel theory under the Gramm-Leach-Bliley Act (GLBA). Alongside the FTC, the Department of Justice has also filed criminal charges against ex-CEO Alexander Mashinsky. Additionally, the Securities and Exchange Commission and the Commodity Futures Training Commission have filed separate civil enforcement actions against Celsius.
Ethan, Kim, and Addison discuss the intricacies of the FTC's enforcement actions against Celsius Network, including their creative use of the GLBA, and the impact this will have on future enforcement actions against companies in the digital asset ecosystem.
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Aug 10, 2023
Crypto As "Funds" Under the EFTA – How a Court's Recent Ruling May Impact Virtual Currency Platform Operators
In this episode of _The Crypto Exchange_, Troutman Pepper Partner Ethan Ostroff welcomes his colleagues Carlin McCrory and Addison Morgan to discuss a recent case in the Southern District of New York that has been in the news, _Rider v. Uphold HQ_. In _Rider_, the court concluded that virtual currency platform operators may be subject to the Electronic Fund Transfer Act (EFTA) and Regulation E.
The plaintiffs in this class action asserted that Uphold HQ violated the EFTA and Regulation E as the result of an alleged security flaw, which enabled unauthorized actors to access plaintiffs' accounts maintained by Uphold HQ. In response to Uphold HQ's motion to dismiss, the court held that cryptocurrencies constituted "funds" within the meaning of the EFTA, enabling plaintiffs to proceed with their claim for violation of the EFTA and claim for negligence _per se_ based on violation of the EFTA. The court held, "Under its ordinary meaning, the term 'cryptocurrency' means a digital form of liquid, monetary assets that constitute 'funds' under the EFTA" based on the dictionary definitions of the terms "funds" and "cryptocurrency."
Ethan, Carlin, and Addison discuss how the court's analysis of the term "funds" within the EFTA may lead to potential significant ramifications for virtual currency platform operators.
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May 31, 2023
Crypto Enforcement Actions
In this episode of _The Crypto Exchange_, Troutman Pepper Partner Ethan Ostroff welcomes his colleague Mike Lowe to discuss crypto enforcement actions, including criminal enforcement actions related to cryptocurrency. Mike shares his experience in crypto enforcement during his lengthy tenure as a federal prosecutor.
Ethan and Mike also discuss the Department of Justice's (DOJ) history of crypto enforcement, statutes the DOJ uses to charge crypto fraud cases, as well as several crypto-related fraud cases prosecuted by the DOJ. Ethan and Mike further explore the Securities and Exchange Commission's (SEC) civil enforcement actions and how heavily it relies upon the anti-touting provisions of the Securities Act when filing complaints. Lastly, Mike shares his thoughts on what our listeners might expect from the DOJ and the SEC regarding enforcement actions going forward.
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Mar 21, 2023
Autorenewals
Most consumers have signed up for subscriptions, automatic deliveries, or free trials that convert into a paid subscription. In this episode of _The Crypto Exchange_, Carlin McCrory welcomes colleagues Mark Furletti and Jill Dolan to discuss legal and regulatory developments related to autorenewals — the recurring payments for these subscriptions. Our panel examines state and federal laws pertaining to negative option offers, including Section 5 of the FTC Act; recent actions by state attorneys general on autorenewal and cancellation policies; and how companies can ensure compliance with relevant requirements.
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Mar 2, 2023
Crypto Year in Review 2022: Crypto Enforcement and the U.S. Treasury
In the fourth and final segment of our four-part _Crypto Year in Review_ series, Ethan Ostroff, Keith Barnett, and Carlin McCrory discuss how the U.S. Treasury Department — including the Office of Foreign Asset Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) bureaus — functions in the digital asset space. Our speakers examine how these financial services regulators seek to deter criminal activity, such as money laundering, financing of terrorist activities, AML/CFT violations, and sanctions compliance in the digital asset space in 2022, and what we can expect in 2023.
Be on the lookout for the next episode of _The Crypto Exchange_, focusing on autorenewals.
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Mar 1, 2023
Crypto Year in Review 2022: State-Level Regulatory Developments in the Digital Asset Market
In the third segment of our four-part _Crypto Year in Review_ series, Ethan Ostroff, Keith Barnett, and Addison Morgan discuss state-level regulation of interest-bearing cryptocurrency deposit products. Our speakers explain these product types and cover how state attorneys general and other regulators seek to protect consumer interests amid the rapidly evolving digital asset landscape.
Be on the lookout for the final episode of this four-part podcast series.
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Feb 23, 2023
Crypto Year in Review 2022: Federal Reserve and Central Bank Digital Currencies and FDIC/OCC Regulatory Developments
In the second segment of our four-part _Crypto Year in Review_ series, Rene McNulty, Carlin McCrory, and Ethan Ostroff discuss the Federal Reserve and its research and experimentation on Central Bank Digital Currencies (CBDCs), examining the steps that the Fed took toward potential CBDC implementation. Our panelists also review recent crypto-related regulatory developments at the FDIC and OCC, discussing what these actions can tell us about regulatory trends and priorities.
Be on the lookout for our next episode of this podcast series.
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Feb 7, 2023
Crypto Year In Review 2022: CFPB and FTC Enforcement Trends
In the first of a four-part _Crypto Year in Review_ series, Carlin McCrory, Keith Barnett, and Ethan Ostroff look at how the CFPB and FTC viewed and regulated cryptocurrency in 2022. The panel examines statements by CFPB Director Rohit Chopra and recent CFPB and FTC enforcement actions, identifying likely regulatory trends for 2023 and beyond.
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Jan 10, 2023
Evaluating Fraud Under the Bank Secrecy Act
In this episode of _The Crypto Exchange_, Troutman Pepper attorney Carlin McCrory welcomes Disputes, Compliance and Investigations Managing Director Terri Sands from Stout to discuss the risks and regulatory scrutiny that financial institutions and fintechs face as to fraud and the Bank Secrecy Act (BSA). In her position, Terri serves as a leader in the payments, BSA/AML, and OFAC/Sanctions and fraud and risk management areas.
During the podcast, Carlin and Terri discuss a variety of topics on the BSA, including the biggest fraud risks that financial institutions encounter, as well as what they can do to prepare for security threats. With evolving risks, financial institutions and fintechs must ensure their staff is trained and that they have a true understanding of the risks they face on a day-to-day basis. Additionally, Carlin and Terri examine reasons why financial institutions can find themselves under regulatory scrutiny and steps executive management teams can take to avoid thes…
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Dec 1, 2022
Bankruptcy Filings Among Crypto Exchanges: Is This a Sign of the Future?
In this episode of _The Crypto Exchange_, Troutman Pepper Consumer Financial Services Partner Ethan Ostroff welcomes back Deborah Kovsky-Apap to discuss the recent FTX bankruptcy and other bankruptcy-related developments in the crypto space.
Ethan and Deb dive into the recent news that has shook the entire crypto world and how this may affect the crypto landscape going forward.
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Nov 22, 2022
Crypto and the SEC
In this episode of _The Crypto Exchange_, Troutman Pepper Partners Ethan Ostroff and Keith Barnett welcome their colleague Jay Dubow to discuss recent updates in the crypto space related to activities by regulators on the state and federal level around questions involving securities. Jay, who formerly worked as a branch chief in the SEC's Division of Enforcement, provides a unique perspective and insight into our conversation surrounding crypto and the SEC.
Ethan, Keith, and Jay also discuss possible enforcement actions by the SEC in the crypto space that our listeners should pay attention to in the coming months, as well as what companies in this space should consider when trying to figure out whether they need to register under federal and state securities laws.
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Oct 12, 2022
The CFPB's Focus on Crypto and Payments
In this episode of _The Crypto Exchange_, Troutman Pepper Consumer Financial Services Partner Kalama Lui-Kwan welcomes back Keith Barnett and Carlin McCrory to discuss recent interviews by Rohit Chopra from the CFPB related to consumer protection issues, true lender matters, actions against repeat offenders, as well as P2P platforms and the CFPB’s stance on fees.
Keith and Carlin also discuss a recent report released by the CFPB, _The Convergence of Payments and Commerce: Implications for Consumers_, that examines the challenges in new product categories and risks to consumers inherent in the evolving payment ecosystem.
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Sep 16, 2022
Banking Regulations in a Crypto World
In this episode of _The Crypto Exchange_, Troutman Pepper Consumer Financial Services Partner Ethan Ostroff welcomes James Stevens to examine recent crypto-related activities by banking regulators. Ethan and James discuss the regulators that interact with banks and financial institutions and their regulation of crypto activities, including the lack of consistency and its impact on the banks and financial institutions.
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Sep 16, 2022
Whose Crypto Is It Anyway? Bankruptcy and Crypto
In this episode of _The Crypto Exchange_, Troutman Pepper Partner Keith Barnett welcomes his colleague Deborah Kovsky-Apap to discuss various bankruptcy issues facing crypto exchanges, including who exactly owns the digital assets when an exchange files for bankruptcy. Additionally, Keith and Deborah explore bankruptcy eligibility for crypto exchanges and security interests in crypto.
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Aug 23, 2022
Senators Urge CFPB to Increase Consumer Protection Against Payment App Scams
In this episode of _The Crypto Exchange_, Troutman Pepper Consumer Financial Services Partner Kalama Lui-Kwan welcomes back Keith Barnett and Carlin McCrory to discuss consumer protection under Regulation E and a recent letter from democratic senators, urging the CFPB to hold banks liable for consumer losses when the consumers provide alleged fraudsters with access to their own accounts through payment apps. Keith and Carlin examine the senators’ concerns, as well as how any potential changes that the CFPB makes could impact financial institutions significantly.
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Aug 9, 2022
A Conversation with Third Party Payment Processors Association President Marsha Jones
In this episode of _The Crypto Exchange_, Troutman Pepper attorneys Keith Barnett and Carlin McCrory welcome Marsha Jones from the Third Party Payment Processors Association to discuss a portion the ENABLERS Act, which proposes to update federal anti-money laundering laws to include payment processors within the definition of “financial institution.” The ENABLERS Act is co-sponsored by Representatives Joe Wilson (R-SC), Tom Malinowski (D-NJ), Maria Elvira Salazar (R-FL), Steve Cohen (D-TN), Abigail Spanberger (D-VA), and Richard Hudson (R-NC). Keith, Carlin, and Marsha discuss the significant ramifications that the ENABLERS Act will have on payments processors if it is passed. This is a must listen for payment processors, banks, and money transmitters!
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Jul 21, 2022
Crypto and Beyond: California DFPI Opinions on Money Transmission and the Money Transmission Act
In second episode of _The Crypto Exchange_, Troutman Pepper Consumer Financial Services Partner Ethan Ostroff welcomes back Keith Barnett and Carlin McCrory to discuss opinions released over the past year involving money transmission and the Money Transmission Act and how they impact stakeholders in the digital asset and payment spaces.
Keith and Carlin are both regulatory, compliance, and payments attorneys with experience representing financial institutions, fintechs, lenders, debt collectors, payment processors, neobanks, and virtual currency companies. They also advise cryptocurrency exchanges and NFT platforms on state and federal money transmission law compliance and regulatory issues, and represent these companies in lawsuits and government enforcement actions.
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Jul 21, 2022
Convenience Fees: Why You Need to Pay Attention?
In the first episode of _The Crypto Exchange_, Troutman Pepper Consumer Financial Services Partner Ethan Ostroff welcomes his colleagues Keith Barnett and Carlin McCrory to discuss recent developments with convenience fees in the payments industry. With both of their practices focusing on payments-related issues, Keith and Carlin take a deep dive into the recent CFPB advisory opinion on convenience fees and how it affects payment processors, money transmitters, and loan servicers. Additionally, they explore how the CFPB's advisory affects card network rules and how the rules mesh with state laws.
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Jul 19, 2022
Introducing The Crypto Exchange Podcast
Troutman Pepper's _The Crypto Exchange_ podcast explores the trends, challenges, and legal issues our clients and others in the industry face daily. Featuring insights from the firm's FinTech and Payments practice groups, our podcast examines everything from NFTs to Web3, bitcoin to blockchain, fintech to regtech, and payment processing to data processing. Our Troutman Pepper attorneys, along with industry experts and insiders, will walk you through the federal and state regulatory, legal, and business intricacies of this rapidly evolving industry sector.
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