fbpx
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA
Thursday, March 30, 2023
Online Crypto College
CREATE FREE ACCOUNT
  • Home
  • Live Crypto Prices
  • Crypto News
    • Bitcoin
    • Altcoin
    • Blockchain
    • Regulation
    • Trading
  • Learn Crypto For Free
  • Login
No Result
View All Result
  • Home
  • Live Crypto Prices
  • Crypto News
    • Bitcoin
    • Altcoin
    • Blockchain
    • Regulation
    • Trading
  • Learn Crypto For Free
  • Login
No Result
View All Result
Online Crypto College
No Result
View All Result

California DFPI Seeks Comments to Strengthen Consumer Protection Oversight of Digital Assets | Cooley LLP

June 14, 2022
in Regulation
Reading Time: 5 mins read
A A
California DFPI Seeks Comments to Strengthen Consumer Protection Oversight of Digital Assets | Cooley LLP
ShareShareShareShareShare

On June 1, 2022, the California Department of Financial Protection and Innovation (DFPI) released an invitation for public comments to inform its development of a comprehensive regulatory approach for digital (or crypto1) assets. The DFPI’s invitation for comments is one of numerous actions ordered by California Gov. Gavin Newsom’s recent blockchain executive order issued on May 4, 2022, which delegated a central role to the DFPI in light of its dual mandate to protect consumers and foster responsible innovation.

As directed by the executive order, the DFPI is seeking comments on how it should approach regulation of crypto assets pursuant to its authority under the California Consumer Financial Protection Law (CCFPL), the state’s consumer financial protection law that is modeled after provisions of the federal Dodd-Frank Act. In particular, the invitation for comments asks if rulemaking is necessary to clarify how the CCFPL should apply to crypto assets (e.g., whether crypto meets the definition of a consumer “financial product or service”), as well as persons involved in offering or providing such crypto assets (i.e., “covered persons” or “service providers” under the CCFPL). It also seeks specific input on how the DFPI can advance key regulatory priorities and how the DFPI should conduct a market-monitoring order, which was mandated by the executive order, to inform its future rulemaking. Public comments are due by August 5, 2022.

Related articles

Bitcoin price briefly hits $29K despite regulatory crackdowns – Cointelegraph

Bitcoin price briefly hits $29K despite regulatory crackdowns – Cointelegraph

March 30, 2023
SEC’s Gary Gensler seeks for more staff, resources to regulate crypto

SEC’s Gary Gensler seeks for more staff, resources to regulate crypto

March 29, 2023

DFPI’s invitation for comments

The invitation for comments includes 16 specific questions under three broad topics, as outlined below.

Regulatory priorities

The invitation for comments requests input on how the DFPI can advance certain key regulatory priorities (including specific actions the DFPI should take) with respect to crypto asset-related financial products and services. These priorities include:

  • Better protecting consumers and investors.
  • Improving consumer education.
  • Ensuring financial stability in the market.
  • Addressing climate change.
  • Harmonizing the state’s regulatory approach with that of federal authorities.
  • Working with other state regulators to promote consumer protection and reduce unnecessary burdens.
  • Promoting inclusive innovation and equity.
  • Making “California the most desirable state for responsible [crypto asset] companies.”

CCFPL regulation and supervision

The invitation for comments seeks feedback on whether rulemaking is required or should be adopted under the CCFPL to:

  • Require registration of crypto asset-related financial products and services.
  • Specify which crypto asset-related financial products and services should be included in the CCFPL’s definition of a “financial product or service.”
  • Identify any unlawful, unfair, deceptive, or abusive acts or practices in connection with the offering of crypto asset-related financial products and services.
  • Ensure full and accurate disclosure of features of crypto asset-related financial products and services.
  • Require the filing of annual or special reports for the DFPI to perform its monitoring and other responsibilities.

Market-monitoring order

The invitation for comments requests input on how the DFPI should conduct the market-monitoring order directed by the executive order – such as the scope of the order (e.g., which companies and products/services should be included), and what information should be collected and made publicly available in aggregate form.

Parties are not limited to providing comments on the specific questions in the invitation for comments. For example, the DFPI indicates that parties may comment on areas for potential rulemaking relating to crypto assets under other laws administered by the DFPI, including the California Money Transmission Act (the MTA)2 and the California Financing Law.3

Comments and outlook

Newsom’s blockchain executive order states that California seeks to foster responsible innovation by blockchain (including cryptocurrency) companies in the state and harmonize California’s approach to the regulation of crypto assets with that of the federal government. (For more information on President Joe Biden’s executive order on digital assets, refer to this March 2022 Cooley alert: Biden Executive Order on Cryptocurrencies and Other Digital Assets Emphasizes Innovation and Regulation). A central objective of Newsom’s executive order is to facilitate the development of a comprehensive regulatory approach for crypto assets that would better protect consumers. Newsom’s executive order and the DFPI’s invitation for comments also indicate that new regulatory guidance and rulemaking regarding crypto assets are likely forthcoming.

The CCFPL, which went into effect last year, provides the DFPI with broad discretion to interpret and implement the law. In particular, it gives the DFPI significant authority to regulate the offering and provision of consumer financial products, and nonexclusive oversight and enforcement authority, under California consumer financial laws and, to the extent permissible, nonexclusive oversight and enforcement authority under federal consumer financial laws.4 Among other things, it prohibits covered persons and service providers from engaging in unlawful, unfair, deceptive, or abusive acts or practices.

To date, the DFPI has notably steered clear of regulating activities involving cryptocurrency under the California MTA. In interpretative opinions, the DFPI has consistently stated that it is not currently requiring persons engaged in activities involving virtual currency – including buying, selling, exchanging and holding virtual currency – to be licensed as a money transmitter. This approach has given the industry time to evolve and the DFPI time to evaluate an appropriate regulatory construct. The executive order and invitation for comments, however, suggest that the state is now taking a different tack and may soon be ready to act. So, while it is possible that the DFPI could still decide to regulate at least some digital asset activity under the MTA, persons operating in the digital asset space who are not exempt or do not become exempt (e.g., by obtaining a money transmission license) from regulation under the CCFPL can expect any DFPI rulemaking under the CCFPL to have a direct impact on their operations in California.

The invitation for comments and any resulting regulatory guidance or regulations also are likely to influence the DFPI’s future enforcement activity, especially in light of the executive order’s additional mandate to enforce violations of the CCFPL and other consumer financial laws. However, while the DFPI has to date taken a wait-and-see approach with respect to licensing and supervisory oversight, this has not precluded enforcement activity in this space. For example, the DFPI has shown no signs of delaying enforcement activity in connection with the offering and selling of products relating to digital assets that constituted securities in California but were not registered, qualified, or permitted for sale in the state as required by California Corporations Code section 25110, as seen in the BlockFi Lending consent order.

Given the precedents in other states, the breadth of the DFPI’s questions in the invitation for comments, and its current enforcement activities – especially in light of recent instability, volatility and consumer losses – the DFPI could implement new safety and soundness, registration, and consumer disclosure requirements through regulatory guidance and rulemaking. Thus, the invitation for comments should be closely evaluated by all interested parties, and those who may be impacted by new regulations should consider this a valuable opportunity to inform the scope of the DFPI’s long-awaited regulation of digital asset activity.


Notes
  1. Newsom’s blockchain executive order defines the term “crypto asset” as “a digital asset, which may be a medium of exchange, for which generation or ownership records are supported through a blockchain technology.”
  2. Cal. Fin. Code § 2000, et seq.
  3. Cal. Fin. Code § 22000, et seq.
  4. The CCFPL does not apply to banks and other chartered financial institutions, and entities subject to licensing (e.g., money transmitters, finance lenders and broker-dealers) or certificate requirements by the DFPI, to the extent that such entities are acting under the authority of one of those charters, licenses and certificates. It also does not apply to licensees of any other state agency other than DFPI to the extent that such licensees are acting under the authority of those licenses. (See Cal. Fin. Code § 90002 for the full list of exemptions.)

[View source.]

Credit: Source link

ShareTweetSendPinShare
Previous Post

What is Celsius Network? Its rise & fall explained in simple terms

Next Post

MicroStrategy CEO Sheds Margin Call Woes As Bitcoin Nears $21,000

Related Posts

Bitcoin price briefly hits $29K despite regulatory crackdowns – Cointelegraph

Bitcoin price briefly hits $29K despite regulatory crackdowns – Cointelegraph

March 30, 2023

Bitcoin price briefly hits $29K despite regulatory crackdowns  Cointelegraph Credit: Source link

SEC’s Gary Gensler seeks for more staff, resources to regulate crypto

SEC’s Gary Gensler seeks for more staff, resources to regulate crypto

March 29, 2023

Ad SEC chair Gary Gensler asked U.S. lawmakers for greater resources to increase his agency’s staff count during a hearing...

Australia Seeks To Accelerate Regulation Of Crypto Sector – Bitcoinist

Australia Seeks To Accelerate Regulation Of Crypto Sector – Bitcoinist

March 29, 2023

Australia Seeks To Accelerate Regulation Of Crypto Sector  Bitcoinist Credit: Source link

Texas bill seeks to eliminate incentives for Bitcoin miners

Texas bill seeks to eliminate incentives for Bitcoin miners

March 29, 2023

Ad A new Texas Senate bill is looking to eliminate the incentives put in place to attract cryptocurrency miners to...

It's Time for Crypto To Regulate Itself – Blockworks

It's Time for Crypto To Regulate Itself – Blockworks

March 29, 2023

It's Time for Crypto To Regulate Itself  Blockworks Credit: Source link

Load More
Next Post
MicroStrategy CEO Sheds Margin Call Woes As Bitcoin Nears $21,000

MicroStrategy CEO Sheds Margin Call Woes As Bitcoin Nears $21,000

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Binance Halts Spot Trading After Matching Engine Glitch

Binance Halts Spot Trading After Matching Engine Glitch

March 24, 2023
Will TMS Network overpower among Dogecoin & Solana?

Will TMS Network overpower among Dogecoin & Solana?

March 29, 2023
MetaMetaverse rebrands to MultiversalME for multiversal interoperability

MetaMetaverse rebrands to MultiversalME for multiversal interoperability

March 23, 2023
Bitcoin Price Analysis: Orbiting 27901

Bitcoin Price Analysis: Orbiting 27901

March 27, 2023
G7 to push for tighter global crypto regulations amid concern about risks – South China Morning Post

G7 to push for tighter global crypto regulations amid concern about risks – South China Morning Post

March 26, 2023

About Us

We provide the latest crypto news, trading tools, and up-to-date education to students and traders all over the world.

ENROLL FOR FREE

Latest Crypto Headlines

  • EU Proposes Cap on Anonymous Crypto Transfers
  • Bitcoin price briefly hits $29K despite regulatory crackdowns – Cointelegraph
  • EU Lawmakers Vote to Impose €1,000 Limit on Unidentified Crypto Transactions – Regulation Bitcoin News
  • U.S. and South Korea vying for Do Kwon trial; extradition destination uncertain
  • Binance’s reputation at risk as CFTC allegations raise concerns
  • Home
  • Live Crypto Prices
  • Crypto News
    • Bitcoin
    • Altcoin
    • Blockchain
    • Regulation
    • Trading
  • Learn Crypto For Free
  • Login
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA

© 2022 - OnlineCryptoCollege.com - All rights reserved!

No Result
View All Result
  • Home
  • Live Crypto Prices
  • Crypto News
    • Bitcoin
    • Altcoin
    • Blockchain
    • Regulation
    • Trading
  • Learn Crypto For Free
  • Login

© 2018 JNews by Jegtheme.

  • bitcoinBitcoin(BTC)$28,340.005.75%
  • ethereumEthereum(ETH)$1,809.545.23%
  • USDEXUSDEX(USDEX)$1.07-0.53%
  • tetherTether(USDT)$1.00-0.10%
  • binancecoinBNB(BNB)$317.222.73%
  • usd-coinUSD Coin(USDC)$1.00-0.19%
  • rippleXRP(XRP)$0.5717.10%
  • cardanoCardano(ADA)$0.38728911.15%
  • staked-etherLido Staked Ether(STETH)$1,806.105.10%
  • dogecoinDogecoin(DOGE)$0.0759735.08%
  • matic-networkPolygon(MATIC)$1.148.68%
  • solanaSolana(SOL)$21.157.08%
  • binance-usdBinance USD(BUSD)$1.000.01%
  • polkadotPolkadot(DOT)$6.246.59%
  • litecoinLitecoin(LTC)$91.796.38%
  • shiba-inuShiba Inu(SHIB)$0.0000114.04%
  • tronTRON(TRX)$0.0646791.17%
  • avalanche-2Avalanche(AVAX)$17.264.84%
  • daiDai(DAI)$1.00-0.25%
  • uniswapUniswap(UNI)$5.995.14%
  • wrapped-bitcoinWrapped Bitcoin(WBTC)$28,296.005.32%
  • chainlinkChainlink(LINK)$7.256.69%
  • cosmosCosmos Hub(ATOM)$11.283.51%
  • leo-tokenLEO Token(LEO)$3.400.69%
  • ToncoinToncoin(TON)$2.123.49%
  • ethereum-classicEthereum Classic(ETC)$20.845.37%
  • moneroMonero(XMR)$157.912.53%
  • stellarStellar(XLM)$0.10560413.34%
  • okbOKB(OKB)$43.261.11%
  • Aerarium FiAerarium Fi(AERA)$7.15-13.10%
  • bitcoin-cashBitcoin Cash(BCH)$123.693.32%
  • filecoinFilecoin(FIL)$5.768.02%
  • AptosAptos(APT)$11.666.87%
  • lido-daoLido DAO(LDO)$2.4318.12%
  • true-usdTrueUSD(TUSD)$1.00-0.24%
  • hedera-hashgraphHedera(HBAR)$0.0610223.57%
  • quant-networkQuant(QNT)$121.842.24%
  • crypto-com-chainCronos(CRO)$0.0684353.07%
  • nearNEAR Protocol(NEAR)$1.946.05%
  • vechainVeChain(VET)$0.0231646.61%
  • ArbitrumArbitrum(ARB)$1.2510.36%
  • algorandAlgorand(ALGO)$0.2167969.11%
  • apecoinApeCoin(APE)$4.172.49%
  • internet-computerInternet Computer(ICP)$5.026.25%
  • blockstackStacks(STX)$1.0218.29%
  • the-graphThe Graph(GRT)$0.14743812.86%
  • fantomFantom(FTM)$0.46085314.95%
  • eosEOS(EOS)$1.155.04%
  • the-sandboxThe Sandbox(SAND)$0.647.40%
  • decentralandDecentraland(MANA)$0.607.36%