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More and more federal and state agencies are weighing in on virtual currency.  Here’s what they are saying:

Financial Crimes Enforcement Network (FinCEN):

  • FinCEN Statement on Providing Banking Services to Money Services Businesses (Nov. 10, 2014)
  • Request for Administrative Ruling on the Application of FinCEN’s Regulations to a Virtual Currency Payment System, FIN-2014 (Oct. 27, 2014)
  • Request for Administrative Ruling on the Application of FinCEN’s Regulations to a Virtual Currency Trading Platform, FIN-2014-R011 (Oct. 27, 2014)
  • Application of Money Services Business regulations to rental of computer systems for mining virtual currency, FIN-2014-R007 (Apr. 29, 2014)
  • Whether a Company that Offers Secured Transaction Services to a Buyer and Seller in a Given Sale of Goods or Services is a Money Transmitter, FIN-2014-R005 (Apr. 29, 2014)
  • Application of FinCEN’s Regulations to Virtual Currency Mining, FIN-2014-R001 (Jan. 30, 2014)
  • Application of FinCEN’s Regulations to Virtual Currency Software Development and Certain Investment Activity, FIN-2014-R002 (Jan. 30, 2014)
  • Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies (Mar. 18, 2013)

Jennifer Shasky Calvery, Director FinCEN:

U.S. Securities and Exchange Commission (SEC):

Internal Revenue Service (IRS):

David S. Cohen, Under Secretary of Terrorism and Financial Intelligence:

U.S. Immigration and Customs Enforcement:

U.S. Department of Homeland Security:

United States Senate, Committee on Homeland Security and Governmental Affairs:

U.S. Government Accountability Office (GAO):

Conference of State Bank Supervisors:

Financial Action Task Force (FATF):

Here’s is what the states are saying:

Alabama Securities Commission

California Department of Business Oversight:

California Assembly:

Connecticut Department of Banking, Securities and Business Investments Division:

Florida Office of Financial Regulation:

Kansas Office of the State Bank Commissioner:

Illinois General Assembly:

  • House Bill 5886 — Bill would amend the Transmitters of Money Act to define “virtual currency” as a medium of exchange that operates like currency in some environments, but does not  have all the attributes of real currency.

Maryland Commissioner of Financial Regulation:

Massachusetts Consumer Affairs and Business Regulation

  • National Study Finds Consumers Aware of Virtual Currency, but Have Concerns (Aug. 27, 2014)

State of Nevada Department of Business & Industry:

  • Nevada Financial Institutions Division issues consumer and investor guidance on virtual currency (Apr. 25, 2014)

New York State Department of Financial Services:

  • Excerpts From Superintendent Lawsky’s Remarks On Virtual Currency and Bitcoin Regulation in New York City (Oct. 14, 2014)
  • Proposed New York Codes, Rules and Regulations, Department of Financial Services, Virtual Currencies (Jul. 2014)
  • In the Matter of Virtual Currency Exchanges, Order Pursuant to New York Banking Law §§ 2-b, 24, 32, 102-a, and 4001-b and Financial Services Law §§ 301(c) and 302(a) (Mar. 11, 2014)

Texas Department of Banking:

  • Supervisory Memorandum ¾ 1037 (Apr. 3, 2014)

Washington State Department of Financial Institutions:

State Wisconsin, Department of Financial Institutions:

  • State agency warns consumers to be cautious with virtual currencies (Apr. 30, 2014)

Others:

Isle of Man, Department of Economic Development:

Here’s is what other countries are saying:

Canada’s Federal Government:

Isle of Man:

Swiss Financial Market Supervisory Authority (FINMA):

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On February 12, 2014, the National Institute of Standards and Technology (NIST) released the final version of its Framework for Improving Critical Infrastructure Cybersecurity (the “Cybersecurity Framework” or “Framework“) and the companion NIST Roadmap for Improving Critical Infrastructure Cybersecurity (Roadmap). The final version is the result of a year-long development process which included the release of multiple iterations for public comment and working sessions with the private sector and security stakeholders. The most significant change from previous working versions is the removal of a separate privacy appendix criticized as being overly prescriptive and costly to implement in favor of a more general set of recommended privacy practices that should be “considered” by companies.

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Joe Jensen, general manager of Intel’s Retail Solutions Division, at the National Retail Federation Convention & Expo, New York, Jan. 13, 2014, confirmed that “Intel has been actively working with leading retailers and the industry for several years to enable retailers to use the Internet of Things to deliver more entertaining brand experiences while also reducing operational costs.” Intel is “taking those efforts a step further by delivering more intelligent solutions and enabling retailers to make better use of big data to deliver a more personalized shopping experience.”

Avid shoppers may be excited to learn that, as reported by Intel, “[w]ith Intel-based Shopping Anywhere, consumers can intuitively shop the looks from their favorite television programs right from their couch.”  Or, “[I]f a consumer prefers to bring the ease of online shopping with them in-store, the Intel® Core™ i7-based MemoryMirror* full-length, digital ‘mirror,’ allows store shoppers to virtually try on multiple outfits, and view and compare previous looks on the mirror or via smartphone or tablet.”  The mirror will use “Intel integrated graphics technology to create avatars of the shopper wearing various clothing that can be shared with friends to solicit feedback or viewed instantly to make an immediate in-store purchase.”  This approaches is expected to provide shoppers with “an engaging and seamless buying experience, regardless of where they are or what device they are using.”

Additional Sources, Intel Newsroom, Intel Personalizes Shopping with Internet of Things, Big Data Technologies (Jan. 13, 2014)

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Connecticut is another state to join in a recent trend to amend the state’s money transmitter law to remove an explicit exemption from licensure previously afforded to agents of entities exempt from license under the state’s money transmitter laws. In Connecticut, under the amended law, “money transmission” means “engaging in the business of issuing or selling payment instruments or stored value, receiving money or monetary value for current or future transmission or the business of transmitting money or monetary value within the United States or to locations outside the United States by any and all means including, but not limited to, payment instrument, wire, facsimile or electronic transfer.” Conn. Gen. Stat. § 36a-596(6), as amended. A person shall be deemed to be engaged in the business of money transmission in Connecticut if such person: (1) has a place of business in Connecticut, (2) receives money or monetary value in Connecticut or from a person located in Connecticut, (3) transmits money or monetary value from a location in Connecticut or to a person located in Connecticut, (4) issues stored value or payment instruments that are sold in Connecticut, or (5) sells stored value or payment instruments in Connecticut. Conn. Gen. Stat. § 36a-597(a), as amended. Kansas’ amended law was effective July 1, 2013, and Connecticut’s amended law was effective October 1. For more information, read our client alerts entitled Starting July 1, Kansas Money Transmitter Act Requires Licensure for Certain Agents and Effective Oct. 1, Connecticut’s Money Transmission Law Requires Certain Agents Be Licensed.

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Pillsbury attorney, Sean Kane, serves on the Governing Committee of the ABA as the Licensing, Merchandising and Branding Division Chair. Sean is participating in the 2013 Annual Meeting of the American Bar Association Forum on the Entertainment and Sports Industries as the moderator for a discussion titled, “PLENARY: Rights of Publicity for Entertainers and Athletes.”

The mission of this Forum is to educate attorneys about the legal issues that pertain to practices in the entertainment, arts and sports industries, and to foster excellence in the practice of law in these fields.

This year the division leadership and planning committee have designed a program of topics and mentoring workshops that provide high level discussion and discourse on hot topics in entertainment and sports as well as seminars on basic principles and mentoring for younger lawyers or lawyers new to these industries. The Annual Meeting is another high level opportunity to present to the membership excellent speakers on cutting-edge issues; you will not be disappointed. We have a number of plenaries on topics that run across all platforms. In addition, panels will explore such hot topic issues as Unpaid Internships in the Sports and Entertainment Industries; A Litigation Update for 2013: Applying Old Law to New Media and Technologies; Moving Money Across Borders: International Tax Considerations for Sports, Media, Talent and Production and the Impact on Net Profit and Cash Flow; and the Impact of Digital Media and Distribution on Film, TV, Music and Other Content.

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In June, Pillsbury welcomed Riaz Karamali to the Corporate & Securities – Technology practice in the firm’s Silicon Valley and San Francisco offices. He has vast experience with start-ups and in the the videogame space is a strong fit with Pillsbury’s capabilities in the San Francisco Bay Area. Mr. Karamali has acted as outside general counsel to many privately-held companies across a range of industries including the video game, cloud computing, mobile, biotechnology, semiconductor and medical device sectors. He frequently represents clients in Europe, Asia, and the Middle East on cross-border transactions.

Riaz is a great addition to the firm’s Social Media & Games team. Pillsbury’s multidisciplinary Social Media & Games team includes over 70 attorneys around the world working at the forefront of emerging business and legal issues relating to Virtual Goods & Currency, Gamification, Gamblification, Mobile Apps and Location Based Services, Augmented Reality, Online & Video Games, Social TV and much more.

The team’s unique capability to provide comprehensive, proactive advice on these cutting-edge issues results, in part, from our attorneys’ commitment to be involved and stay abreast of rapidly evolving business, legal and technical trends. Through this investment, our team obtains valuable knowledge and insights that enable us to provide significant strategic advice and resources to clients, well beyond just “doing legal work.”

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It took just two weeks for the first online poker site located and operated completely inside the United States to deal its one millionth hand of poker. While UltimatePoker.com is only available to Nevada residents located in Nevada at this point, it has set the stage for what is likely to be a rapidly expanding market.

For more information, check out Ultimate Poker’s legal online betting foray could be a game changer in the U.S.

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The parent company of online poker site PokerStars has put in a bid to buy the brick & mortar based The Atlantic Club Casino in Atlantic City, New Jersey. This appears to be the first time an online-only gambling site operator has attempted to buy a land-based operation. It remains to be seen whether the bid will be accepted, as it is already being challenged by the American Gaming Association (which represents land-based casinos). http://news.yahoo.com/pokerstars-ac-bid-sparks-battle-153442498.html

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Binary world  A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

 

 

Union Facebook Page Not Picket Line Extension: NLRB Judge
A National Labor Relations Board judge ruled Wednesday that federal labor law did not require a union to disavow statements posted on its Facebook page by its members that threatened workers who chose to continue to work during a strike.

Parody New York Times Twitter Account Restored
You can’t keep a good Twitter account down, it seems. According to Politico, the micro-blogging site has restored a New York Times parody account one day after it was pulled amidst complaints from the paper.

How to Account for a Virtual Good
U.S. market regulators are demanding more details about how companies account for virtual goods — the virtual clothing, food, tools or powers sold in online or in social media networks and games.

Zynga Takes Gambling Step in Nevada
Zynga Inc. has taken its first official step toward offering real-money gambling games in the U.S. by filing preparatory paperwork in Nevada, as the embattled firm maneuvers to take advantage of a shifting legal landscape.

In D.C., Social-Media Surveillance Pays Off
The local government in the nation’s capital is paying hundreds of thousands of dollars to a startup to gather comments on Twitter, Facebook and other online message boards as well as the government’s own website. The data help form a letter grade for the bureaucracies that handle drivers licenses, building permits and the like.

Zynga to Bundle Games with Cable TV
Social-games provider Zynga Inc. and Synacor Inc. reached an agreement to make Zynga game currency available to pay-TV and high-speed internet providers as part of their consumer bundles, a move that could reduce Zynga’s heavy dependence on Facebook Inc.

Study Points to Videogame Popularity Among Boomer Women
A new study of more than 32,000 videogame players has found that women make up a solid majority of “baby-boom” gamers, aged 50 or more, and they spend far more time playing than their younger counterparts.

Netflix CEO Hastings Faces SEC Action Over Facebook Post
Netflix Inc. (NFLX) and Chief Executive Officer Reed Hastings said they may face a U.S. Securities and Exchange Commission civil claim over a July Facebook post that coincided with the stock’s biggest gain in almost six weeks.

PokerStars In Talks to Buy Atlantic City Casino
Online poker company PokerStars is in talks to buy the troubled Atlantic Club Casino Hotel in Atlantic City, N.J., just four months after forking over $731 million to the government in order to settle fraud allegations, according to Friday news reports.

Facebook Says Teens Have No Personal Claims In Game Suit
Facebook Inc. on Thursday said a proposed class action alleging the company improperly profited from game credits unknowingly purchased by minors with their parents’ credit cards should be tossed because the minors want to recover money paid from their parents’ accounts but aren’t seeking a remedy of their own.

FTC looks at mobile apps firms over child privacy concerns
An agency report shows that a majority of app developers may have violated laws aimed at kids’ apps.

Opponents say ITU treaty threatens Internet freedom
The United States joined 20 other countries in refusing to sign a treaty that the objectors say will harm Internet freedom. The proposal was hammered out at an international communications conference that ended Friday in Dubai.

Guardian nixes its Facebook social reader, regains control over its content
After a year-long experiment that saw its Facebook “social reading” app gain more than six million monthly users – and then lose more than half of those after the network changed the ways those apps work – the Guardian has decided to take back control of its content.

 

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Senator Richard Blumenthal (D-CT) recently introduced S. 3636, the Gift Card Consumer Protection Act of 2012, which would ban expiration dates and specified fees for inactivity or services on gift certificates, store gift cards, or general-use-prepaid cards (“Cards”), including those issued in connection with loyalty, award and promotional programs (“Loyalty Products”). The legislation would change current federal gift card law, which permits issuers to charge certain fees after 12 consecutive months of inactivity, permits expiration after 5 years, and excludes Loyalty Products from these restrictions if certain disclosures are made. Senator Blumenthal commented: “Today I am introducing legislation to help substantially remedy that problem and to ensure that consumers receive the full value that is stored on their gift cards.

Whether it is a bankrupt company that refuses to honor a gift certificate, a gift card with hidden fees that slowly withers down to nothing, or a ‘promotional’ gift card that expires in the virtual blink of an eye, consumers in Connecticut and across the nation are in danger of seeing the value of their gift cards disappear.”

In summary, the bill proposes to:
·         Ban inactivity fees on Cards
·         Ban expiration dates on Cards
·         Eliminate the exclusion for Loyalty Products
·         Provide stronger consumer protections for cardholders when a company that issues or sells gift cards files for bankruptcy protection

Click here to read the complete bill.

Many issuers of Cards will be surprised to learn that the bill would prohibit expiration dates on Loyalty Products. Loyalty Products typically include strategically developed expiration dates designed to incentivize patronage during periods of time when sales are generally slower or when competition is fierce. If expiration dates on these products are prohibited, Loyalty Products may be far less effective for these and other purposes.