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In its third action involving NFTs, the SEC targets a restaurant membership token tied to fundraising and promises of potential price appreciation for buyers.

By Jenny Cieplak, Ghaith Mahmood, Nima H. Mohebbi, Stephen P. Wink, and Deric Behar

On September 16, 2024, the Securities and Exchange Commission (SEC) issued a cease-and-desist order (the Order) against Flyfish Club, LLC (Flyfish) for an unregistered offering of crypto asset securities relating to Flyfish’s sale of $14.8 million worth of non-fungible tokens (NFTs), in violation of Section 5 of the Securities Act of 1933 (and no exemption from registration was available). The SEC alleged that the NFTs were issued to the public to finance the construction and operation of a members-only restaurant and club in in New York City.

Flyfish neither admitted nor denied any wrongdoing as part of the settlement, which does not include any allegations of misleading or fraudulent statements.

The SEC obtained this settlement roughly a year after its first and second enforcement actions against NFT issuers (for more information, see this Latham blog post on the first enforcement and this Latham blog post on the second enforcement), and less than a month after issuing a Wells Notice against one of the industry’s largest NFT marketplaces.

Mica Tracker

Online resource provides overview of delegated acts, technical standards, and guidelines for cryptoasset businesses.

Latham & Watkins has launched the Markets in Crypto-Assets Regulation Tracker, a new online resource that provides cryptoasset businesses with critical information to help navigate MiCA — a robust and detailed regulatory framework for cryptoassets.

Since MiCA was first published in…

I don’t know if I’ve become an integral part of another echo chamber or if this is actually big, but BTCfi is flooding my Twitter timeline.

The idea is pretty straightforward, BTC is now a trillion+ dollar asset and this liquidity cannot go to dump yard due to regressive maximalism. Instead, we should figure out…

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Paycheck advance products that are deemed consumer loans under the CFPB’s new proposal would be subject to increased disclosure and regulatory protections.

By Parag Patel, Barrie VanBrackle, and Deric Behar

The Consumer Financial Protection Bureau (CFPB) recently proposed an interpretive rule titled “Consumer Credit Offered to Borrowers in Advance of Expected Receipt of…

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The case involves substantive litigation that could yield important legal principles for the treatment of decentralised projects.

By Dominic Geiser, Simon Hawkins, Sam Maxson, and Truman Mak

Decentralised autonomous organisations (DAO) are unique structures that operate autonomously in accordance with preset rules, utilising a blockchain and coordinated through a distributed consensus model.…

It was one of those hangry evenings, where you reconsider legal bans on cannibalism. Glued to the screen, I kept on visiting the Zomato app, watching my Tandoori Chicken travel at the speed of a snail. Half dead, lying on my sofa, I finally got the coveted notification:

“Your order has been delivered”

But wait…

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The UK’s consultation on deregulating commercial agents could have knock-on impacts on payment services and create regulatory divergence from the EU.

By Christian McDermott, Brett Carr, and Grace Erskine

On 16 May 2024, the UK government launched a consultation into the deregulation of the Commercial Agents (Council Directive) Regulations 1993 (the Commercial Agents Regulations). The Commercial Agents Regulations implemented Council Directive 86/653/EEC (the Commercial Agents Directive) and defined certain pro-agent terms of engagement between businesses and their self-employed commercial agents who are authorised to negotiate the sale or purchase of goods on their behalf.

The stated purpose of the consultation is to ensure that the Commercial Agents Regulations serve the needs of UK businesses post-Brexit, and to remove the legal complexities resulting from the interaction of the Commercial Agents Regulations with the English legal system’s rules on agency and contract law. The UK government’s current proposal is for existing contracts under the Commercial Agents Regulations to remain in force until termination or expiry, and to prevent new contracts from being subject to the Commercial Agents Regulations.

In addition to affecting relationships between UK agents and their principals, the proposals could also have knock-on effects for the payments sector, which we explore in this post.

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The government will enact the new legislation to bring issuers of fiat-referencing stablecoins into the regulatory perimeter.

By Simon Hawkins, Adrian Fong, and Sam Maxson

On 17 July 2024, the Financial Services and the Treasury Bureau and the Hong Kong Monetary Authority (HKMA) released the consultation conclusions on their legislative proposal for a…