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Gabriel Khoury is an associate in the Corporate Group in the firm’s Washington, D.C. office. He is the Lead Associate of the Blockchain and Digital Assets Team.

On June 8, the New York State Department of Financial Services (DFS) released its Guidance on the Issuance of U.S. Dollar-Backed Stablecoins meant to set foundational criteria for USD-backed stablecoins issued by DFS-regulated entities on the issues of redeemability, assets reserves and attestations about such reserves. Here are some of the highlights from the guidance.

Continue Reading New York Releases Stablecoin Guidance

On May 19, Alessio Evangelista, the Associate Director of the Enforcement and Compliance Division of FinCEN, presented at the Chainalaysis Links Conference on the topic of “Intersection of Cryptocurrencies and National Security.”  Evangelista stated that crypto firms “have the same obligations as all other financial institutions to ensure that their new offerings can leverage innovations while still protecting consumers, reducing cybercrime, combating illicit financial activity, and ensuring their platforms are not used to harm our national security.” He also stressed that the agency believes that innovation goes hand in hand with regulation, rather than being at odds with each other. 
Continue Reading FinCEN Highlights Responsible Crypto Innovation, Warns Service Providers

On May 24, the acting Comptroller of the Currency, Michael Hsu remarked at the DC Blockchain Summit 2022 about his observations on the “deep” vulnerabilities of cryptocurrency in light of the recent market volatility and other events in the crypto economy.  Hsu emphasized three vulnerabilities in particular:
Continue Reading OCC Acting Comptroller: Recent Crypto Events Provide a “Wake-Up Call,” “Opportunity to Reset and Recalibrate”

On May 10, Treasury Secretary Janet Yellen presented the Financial Stability Oversight Council (FSOC) Annual Report before the Senate Banking Committee about the need for sensible stablecoin legislation (we have previously discussed the President’s Working Group (PWG) report on stablecoins here and here).  Secretary Yellen cites the findings in the PWG report as reason to conclude that “the current statutory and regulatory frameworks don’t provide consistent and comprehensive standards for the risks of stablecoins as a new type of payment products, and urges Congress to enact legislation to ensure that stablecoins and such arrangements have a federal prudential framework.”
Continue Reading Stablecoin Regulation Update

On May 17, the FDIC and the CFPB took parallel actions to combat the misuse of  the name or logo of the FDIC and deceptive representations about deposit insurance.  The FDIC approved a final rule implementing its statutory authority to prohibit any person or organization from making misrepresentations about FDIC deposit insurance or misusing the FDIC’s name or logo.  The CFPB followed suit by releasing Consumer Financial Protection Circular 2022-02 providing that company’s likely violate the CFPA’s prohibition on deception acts or practices if they misuse the name or logo of the FDIC or engage in false advertising or make misrepresentations to consumers about deposit insurance, regardless of whether such conduct (including the misrepresentation of insured status) is engaged in knowingly.
Continue Reading FDIC and CFPB Take Action to Protect Against Misrepresentations about FDIC Insured Status and Misuse of Name and Logo

On May 2, the CFPB released its Spring 2022 Supervisory Highlights. The findings of the report, which generally cover examinations completed between July and December 2021, are issued to help institutions and the general public better understand how we examine institutions for compliance with Federal consumer financial laws.  Highlights include the following findings:
Continue Reading CFPB Issues Spring 2022 Supervisory Highlights

On May 2, the CFPB published a blog post demonstrating its commitment to “a fair, transparent, and competitive auto lending market” by calling attention to add-on products for which auto dealers and finance companies “often charge consumers all payments for any add-on products as a lump sum at origination of the auto loan, and they generally include the lump sum cost as part of the total vehicle financing agreement.”  CFPB examiners have focused on how servicers manage these add-on product charges when the loan ends prior to when the add-on product’s potential benefits end.
Continue Reading CFPB Blog: Stop Overcharging for Auto Loan Add-on Products

In an apparent follow up to President Biden’s March Executive Order on Digital Assets (which we previously discussed here), this week, California Governor Gavin Newsom signed a similar executive order aiming to foster responsible innovation, bolster California’s innovation economy, and strengthen consumer protection through creating a transparent regulatory and business environment for Web3 companies.  Newsom’s executive order credits Biden’s executive order as paving the way for the assessment of key issues raised by crypto-assets and sets California on a path to harmonize its nascent crypto regulatory framework with forthcoming federal rules and guidelines and, hopefully, create regulatory clarity for businesses and consumers.
Continue Reading Governor Newsom Signs Blockchain Executive Order