August 14, 2022

Volume XII, Number 226

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August 12, 2022

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August 11, 2022

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California Regulator Seeks Comment on Future Crypto Guidance

On June 1, the California DFPI began formally seeking input from the public to assist in developing guidance and regulatory clarity for Blockchain and Crypto companies as directed by Governor Newsom’s Executive Order (which we previously discussed here). Comments are due on August 5.

In response to the Executive Order, the DFPI seeks to develop regulatory clarity, guidance, and supervisory parameters for those involved in crypto asset-related financial products and services in California. All of the topics are aimed toward creating a clear, safe, and efficient regulatory framework for crypto asset-related financial products and services. Some of those topics include steps the DFPI should take to:

  • Protect consumers from scams and fraud

  • Improve consumer education and outreach

  • Ensure consumer and investor protection

  • Ensure financial stability in the crypto markets

  • Harmonize California’s regulatory approach with the federal approach

  • Work with other state financial regulators to promote a common approach that increases the reach of DFPI’s consumer protection efforts

Putting It Into Practice: For several years, the crypto and blockchain industries have lacked clear regulatory guidance.  This year, state and federal regulators have made strides toward clarifying the muddy crypto waters as demonstrated by the Biden Executive Order (which we previously discussed here) and recent federal enforcement actions and statements from leaders of various federal agencies (which we previously herehere, and here). However, developing alignment among state and federal level regulations may be challenging in light of vacillating approaches that appear to in some cases embrace and other cases reject cryptocurrencies and blockchain technology.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 159
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About this Author

Moorari Shah Bankruptcy Lawyer Sheppard Mullin Law Firm
Partner

Moorari Shah is a partner in the Finance and Bankruptcy Practice Group in the firm's Los Angeles and San Francisco offices. 

Areas of Practice

Moorari combines deep in-house and law firm experience to deliver practical, business-minded legal advice. He represents banks, fintechs, mortgage companies, auto lenders, and other nonbank institutions in transactional, licensing, regulatory compliance, and government enforcement matters covering mergers and acquisitions, consumer and commercial lending, equipment finance and leasing, and supervisory examinations,...

213-617-4171
A.J. S. Dhaliwal Bankruptcy Attorney Sheppard Mullin Washington DC
Associate

A.J. is an associate in the Finance and Bankruptcy Practice Group in the firm's Washington, D.C. office. 

A.J. has over a decade of experience helping banks, non-bank financial institutions, and other companies providing financial products and services in a wide range of matters including government enforcement actions, civil litigation, regulatory examinations, and internal investigations.

With a diversified regulatory, compliance, and enforcement background, A.J. counsels financial institutions in matters involving...

202-747-2323
Associate

Gabriel is an Associate on the Telecom team and the Co-Lead Associate on the Blockchain and Digital Assets team in the firm’s Washington, D.C. office. He is a Blockchain Law Professional as Certified by the Blockchain Council.

At Sheppard Mullin, Gabriel assists the Telecom team in all aspects of communications law and regulation including, satellites, spectrum, 5G implementation, media companies, and new technologies. He assists the Blockchain and Digital Assets team in legal issues relating to the use of blockchain technology, social media, internet, video games, online gambling,...

202-747-2194
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