Links I would send you if I were your lawyer

Legal nuggets for SaaS, Crypto, Fintech founders and builders

Hey Founders et. al. The thought leaders at HeyCounsel (hi Sam and Chris) are trying something a little different today. Imagine that I was your lawyer (legal disclosure: I am not). Now imagine I were to send you emails every now and then saying “hey, look at this!” Well, that’s the idea here.

Every Thursday, I will be sending a list of links to relevant legal happenings related to SaaS, Crypto/Web3, and Fintech. We may expand into other areas in the future, so stay tuned.

For now, check out the links below.

SaaS / Enterprise Tech Law

• Faster contracts. Nobody likes passing NDAs back and forth and then having them reviewed by a lawyer. A few companies are trying to change this are. Common Paper just raised raised a seed round to get everyone working from the same NDA. And NDA Lynn is creating a robot lawyer to review your NDAs. Sounds great, right?

• Agreeing to agree (on data). The U.S. and EU agreed to make an agreement on data transfers, nearly two years after the EU’s top court technically made data flows between the two jurisdictions illegal.

• Big Tech. The EU antitrust legislation that could change how Big Tech does business.

Crypto / Web3 Law

• New crypto regs coming. I’m late to the announcement but it’s still important - Biden announced Executive Order to regulate crypto. This is a very quick summary, but there will be a lot to dig into as digital assets become the focal point of future US and international regulation.

• UK rebranding. Speaking of which - the UK government has set its sights on being a global hub for digital assets tech. HM Treasury has announced a package of measures intended to achieve this vision. This includes the regulation of some stablecoins under e-money rules, an upcoming consultation on regulating broader crypto activities, and a sandbox for financial market infrastructure innovation. The positive messaging signals an attempt to counter suggestions that the UK is no longer an innovation-friendly jurisdiction.

• Watch out, influencers. Tougher regulation will come for the creator economy as well, as digital assets promoters and Web3 projects make their way into influencers pockets and on to your TikTok and Instagram feeds. Recently, Australian markets regulator ASIC published guidance for financial influencers, warning them the financial advice they offer to followers may make them financial service providers subject to registration obligations. Crypto influencers need to pay heed to ASIC’s guidance if the crypto products and services they discuss online are financial in nature.

• SEC is a busy bee. The SEC has been fairly active recently as well:

  • US SEC Chair Gary Gensler wants cooperation with the CFTC (Commodity Futures Trading Commission) to “register and regulate platforms where the trading of securities and non-securities is intertwined.” Securities and commodities have traditionally been entirely separate entities, but digital assets have blurred the line between the two... Better coordination is likely necessary, at least short term, to protect consumers and effectively regulate these markets.

  • The US SEC denied another spot Bitcoin ETF, this time from Cathie Wood’s ARK Invest. The SEC delayed two more BTC spot ETFs (from WisdomTree and One River).

  • The SEC proposed rules that would make DeFi exchanges securities “dealers.” Dealers must register with the SEC, something that may not be possible for DeFi exchanges since there are no central actors.

• Scams are the new… Scams. Ever hear of “Frosties” or “Embers?” The DOJ charged two people in connection with an NFT money laundering rug pull. Just another example of how scammers will always be around. Keep your head on a swivel out there!

• Climate vs. crypto. The White House is seeking public input on crypto’s energy and climate impacts.

Fintech Law

• Beware of the SEC... The SEC released its 2022 Examination Priorities. This is fair warning on what they will be caring about the most for the upcoming year. Broker-dealers, fund managers for retail investors, security folks at fintechs, those building black-boxy algorithms and, of course, crypto heads... beware.

• Money Transmitters… Under a newly-enacted law, money transmitters licensed in California must comply with new customer service requirements starting on July 1, 2022.

• No such thing as “free”. The FTC is suing TurboTax over its ads that claim the product is “free” when it really isn’t for most... I certainly felt this way...

• Late fees. The CFPB released a report on credit card late fees. I think there may be some pressure to reduce or eliminate fees in the near future...

  • Speaking of pressure on fees, Michael Hsu, acting comptroller of the currency (OCC), published an article in American Banker about bank overdraft fees and how banks will soon need to adapt to a world without them.

• Fake reviews. Reviews are great until you realize they aren’t real... The CFPB published guidance on how certain practices violate consumer protections laws. These practices include contracts that forbid posting honest reviews, generating fake reviews, and manipulating or suppressing reviews.

• Fair lending. CFPB has been sending questionnaires to banks recently regarding fair lending issues (e.g., asking how they handle limited English proficiency customers and whether same-sex and opposite-sex couples are asked different questions about their income). Source: American Banker.

Thanks for reading, and stay lawyerly!

Brian