Does CFTC’s Initial Margin Requirement for Inter-affiliate Uncleared Derivatives Transactions Disadvantage U.S. Banking Organizations?

Sangil Min

In September 2019, the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Farm Credit Administration, and Federal Housing Finance Agency proposed rules amending current swap margin requirements for covered swap entities (“CSE”), and have since gathered comments from industry stakeholders.[1] The proposed rule seeks to exempt CSEs from collecting initial margin for non-centrally cleared swaps with their affiliates.[2]


ICO Fundraisers Skating on Thin Ice: Court Sided with the SEC in Finding Grams a Security

Yuwei Liu

On March 24, 2020, Judge Castel of the U.S. District Court for the Southern District of New York sided with the SEC and granted a preliminary injunction to halt Telegram Group’s initial coin offering (“ICO”).[1] Notably, the court held that the Gram token offered by Telegram in the ICO is a “security” (“investment contract”) within the meaning of § 2(a)(1) of the Securities Act of 1933, thus subjecting the offering to the Act’s registration provisions.[2] In reaching the decision, the court adopted an overly broad test –the Bahamas Test – advocated by Professors M. Todd Henderson and Max Raskin,[3] under which no ICOs will escape the fate of being deemed as a security offering. This decision is disappointing because it will inevitably stifle the development of the blockchain industry and blockchain-based technology in the US. The court’s analysis will effectively make almost all ICOs securities offerings, which in turn will prohibit many tech startups from turning to ICOs as a less regulated but more cost-efficient way to raise the funds necessary to develop their blockchain projects.[4]

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