The Securities and Exchange Commission’s (“SEC”) enforcement agenda for the 2022 fiscal year addresses an expansive range of financial industries and products. (Thomas Zaccaro, et al.; Bloomberg Law). Amid the rapid growth of digital assets, the SEC’s enforcement agenda includes increased focus on the scrutiny and regulation of crypto-lending, the process where an investor will deposit cryptocurrencies into a crypto-lending account and earn interest on that deposit in the form of cryptocurrencies. (Id.; Brian Breheny, et al.; Skadden; Joe Light, The Washington Post). However, it was not until a recent SEC enforcement action against BlockFi Lending LLC (“BlockFi”) that the SEC applied the Investment Company Act of 1940 (the “Act”) to a crypto-lending company, which gave the SEC the opportunity to establish its approach for regulating crypto-lending. (Robert Kim, Bloomberg Law)…
Read MoreRussia’s ongoing invasion in Ukraine has not only led to harsh sanctions from nations, such as the U.S., but has also caused many companies to reevaluate their relationship with Russia. (BBC News; The NY Times). As of March 8, 2022, McDonald’s—whose opening in Moscow two months after the fall of the Berlin Wall symbolized a new era in business relations with Russia—closed all 850 Russian locations. (Radio Free Europe; PBS News). Powerful Russian individuals are also not immune from these reactions since the U.S. imposed sanctions on several “oligarchs” who have close personal ties to Putin. (Steve Holland, Matt Spetalnick, & Daphne Psaledakis, Reuters)…
Read MoreCryptocurrencies (“Crypto”) are meant to exist in a neutral haven: Satoshi Nakamoto expressly designed Bitcoin to allow peer-to-peer interactions outside of existing regulatory and political frameworks. (Satoshi Nakamoto, Bitcoin.org). Though Bitcoin and other Cryptos remain apolitical tools, the intersection of theory with harsh reality has led to Crypto’s increasing politicization. For example, consider the statement of Vitalik Buterin, Ethereum’s co-founder: “Ethereum is neutral, but I am not.” (Lionel Laurent, Bloomberg). Buterin’s statement was made in the context of Russia’s invasion of Ukraine, and illustrates a new, fundamental truth: Crypto cannot remain neutral and apolitical in the future…
Read MoreAs blockchain technology use continues to grow, President Biden’s administration is prepared to launch a multifaceted digital assets regulatory regime. In March 2022, President Biden signed an executive order titled “Ensuring Responsible Development of Digital Assets” (“Executive Order”), which directs research efforts across numerous agencies for the implementation of regulations on cryptocurrency and blockchain-recorded exchanges. (Executive Order). Rather than proposing a specific regulation or policy, the Executive Order reflects a “whole-of-government” approach requiring the executive branch and its administrative agencies to develop a comprehensive regulatory framework. Id….
Read MoreThe Biden Administration has recently stressed the importance of cybersecurity through certain requirements on companies that are critical to national interests. (Alan Suderman and Eric Tucker, Associated Press). For example, on March 15, 2022, President Biden signed into law the Cyber Incident Reporting for Critical Infrastructure Act, which aims to combat against a recent breach on U.S. fuel pipeline and to alleviate the concern that Russia’s invasion into Ukraine may increase risk to U.S. infrastructure. (Gibson Dunn). However, this Administration is not alone in its focus on cybersecurity issues. Given the security risks that have arisen from a heavy shift to working from home, these concerns have become more widespread. (Perkins Coie). These feelings likely stem from the evolving technology that allow “cyberpunks” and hackers to breach company infrastructure. Id Following the trend toward more security, the Securities and Exchange Commission (“SEC”) has proposed new cybersecurity rules on a number of different types of investment companies (“Funds”) and investment advisers in an attempt to address and the fight against these types of cyber threats. (Id.; Rachael Schwartz, JD Supra; Federal Registrar)….
Read MoreThe Delaware Supreme Court recently held that a poison pill put in place by The Williams Companies, Inc. (“WCI”) was unreasonable, adopting an eighty-nine page decision issued by the Delaware Court of Chancery on February 26, 2021. (Sierra Jackson, Thomas Reuters). The Court of Chancery ultimately did not believe that a 5% threshold, which acted as the trigger for the poison pill, was reasonable relative to the threat that the pandemic presented to WCI. Id. This will likely discourage other companies from implementing such extreme poison pills in the future, even if the market is volatile as it was during the pandemic. . .
Read More