Fintech
Fintech Capabilities
BANKING, PAYMENTS AND E-COMMERCE REGULATION
- Establishing and operating fintech businesses, including navigating relevant licensing regimes, such as state money transmission and lender licensing requirements and options for a federal “fintech” charter.
- Monitoring and influencing payment, virtual currency, mobile commerce and related legislation and regulation.
- Advising on marketing, e-commerce and distance-selling regulations applicable to financial services that are provided through e-commerce channels.
- Structuring products and commercial arrangements to meet financial and other regulatory requirements.
- Assisting clients in managing risks arising out of evolving payment and lending technologies.
- Representative matters include:
- Mobile wallets: Assisted a leading mobile wallet provider in the creation of a person-to-person payment service, including the negotiation of underlying banking relationships.
- Virtual currency regulation: Advised investors, traders, funds, exchanges and others on the federal regulation of virtual currency activities under the Bank Secrecy Act and state licensing issues.
- Model Virtual Currency Businesses Act: Assisted clients in assessing and commenting on the Uniform Law Commission’s Model Virtual Currency Businesses Act.
- Bitcoin payments: Represented merchants and payment processors in assessing risks and compliance issues associated with acceptance and processing of bitcoin payments.
- Multi-state marketplace platforms and payment intermediaries: Advised providers of marketplace platforms and payment intermediaries in assessing licensing and registration issues on a nationwide basis, including multi-state licensing efforts and structuring relationships to avoid licensing issues.
- Merchant marketplace payment systems: Advised a leading merchant marketplace on structuring a payment infrastructure to accommodate delivery of funds to end merchants.
- Monetizing video streaming: Assisted a video streaming service in creating an ecosystem to monetize the value of content delivery.
- Mobile payments startup: Represented a mobile payments startup in all aspects of its novel payment product development, including evaluation of regulatory issues, state licensing, creation of cardholder documentation and disclosures and negotiation of agreements with banks and processors.
- Social payments startup: Represented a social payments startup in connection with the regulation of its in-game payment services.
- Same-day ACH payment solution: Represented NACHA in connection with the creation of its same-day ACH solution.
- Prepaid reload payment networks: Represented STAR System in the creation of a prepaid reload network.
- Issuer of centrally issued virtual currency: Advised the issuer of a centrally issued virtual currency on regulatory and contract matters for the launch of its payments infrastructure.
- Multi-jurisdiction corporate card programs: Advised several global financial institutions on corporate card programs, including carrying out regulatory due diligence in more than 100 jurisdictions.
SECURITIES, COMMODITIES AND DERIVATIVES REGULATION
- Advising on the application of securities, commodities and derivatives regulations to novel financial products and services, including virtual currencies.
- Evaluating registration and exemption requirements under securities, commodities and derivatives regulations.
- Handling SEC and CFTC registrations for market participants operating in a manner that requires registration as advisors, broker-dealers, exchanges or other categories of registrants.
- Monitoring and influencing legislation and regulation related to securities and commodities.
- Representing clients in a variety of enforcement matters brought by securities and commodities regulators and industry self-regulatory organizations.
- Representative matters include:
- Investors in bitcoin and virtual currencies: Advised investors in entities involved in a variety of bitcoin and other virtual currency activities.
- Clearing bitcoin futures: Prepared a new product analysis regarding the ability of a U.S. Derivatives Clearing Organization to clear and settle a cash-settled futures contract covering Bitcoin traded on the Chicago Futures Exchange.
- Initial coin offerings and DLT-based trading platforms for financial products: Assisted in the assessment of potential initial coin offerings and use of distributed ledger technology (DLT) as part of a trading platform for innovative financial products. Also assisting in addressing regulators’ questions about the nature and proper characterization of coins.
- Initial coin offerings and tokens utilized in trading processes: Advised an investment manager on regulatory issues arising from a plan for an ICO and creating a new derivative product and trading platform that utilizes a token as part of the trading process.
- Robo-advisers: Provided advice about broker-dealer investment adviser regulatory issues in connection with the launch of a robo-adviser product.
- Virtual currency custody requirements: Advised on virtual currency custody requirements for a start-up fintech company providing virtual currency and fiat currency settlement and collateral services.
- Blockchain securities settlement platform: Represented a leading financial technology company in connection with the offering of its next-generation blockchain securities settlement platform to major financial institutions.
- Registered transfer agents for blockchain-based muni bond settlements: Advised a new market entrant in connection with its operation as an SEC registered transfer agent that facilitates municipal bond settlements on a proprietary blockchain.
INVESTMENT FUNDS
- Counseling alternative and traditional asset managers in connection with investments in virtual currency and other digital assets.
- Assisting in the formation and offering of private equity and hedge funds, exchange-traded funds and corporate and venture capital funds investing in virtual currency and other digital assets.
- Advising clients in the complex U.S. federal, U.S. state and non-U.S. laws and regulations governing funds, securities and advisors.
- Representative matters include:
- Venture capital fund for virtual currency investments: Assisted an asset manager with the launch of a venture capital fund focused on virtual currency investments.
- Asset manager and virtual currency proprietary trading vehicle: Assisted an asset manager with the launch of a proprietary trading vehicle for virtual currency investments.
- Exchange-traded commodity pools linked to bitcoin futures: Provided advice in connection with the sponsorship of exchange-traded commodity pools linked to bitcoin futures.
- Sponsor of digital assets fund-of-funds: Advised an independent investment bank and advisory firm in connection with the sponsorship of a digital assets fund-of-funds.
- Virtual currency direct trading funds, fund-of-funds and venture capital funds: Provided assistance in the creation of virtual currency direct trading funds, fund-of-funds and venture capital funds.
CORPORATE TRANSACTIONS
- Guiding mergers and acquisitions involving fintech companies, including diligence on related regulatory issues and risks.
- Advising investors (both financial and strategic) and emerging technology companies in equity and debt investments in fintech startups.
- Supporting transactions for the sale and acquisition of payment-related assets, including card portfolios, merchant-acquiring portfolios and other payments businesses.
- Representing issuers, underwriters and other financial intermediaries on IPO and follow-on and private offerings.
- Assisting with secured loans to fintech companies by banks and other lenders for warehouse or working capital purposes.
- Negotiating joint venture agreements for fintech services based on years of experience in helping clients manage commercial imperatives in highly regulated spaces.
- Representative matters include:
- PayPal Credit: Represented PayPal in the negotiation of a long-term agreement with Synchrony Financial to support PayPal Credit, and the sale of almost $7 billion of credit-related assets to Synchrony.
- PayPal and various matters: Represented PayPal (and eBay prior to the spin off of PayPal) in connection with a series of acquisitions totaling billions of dollars, including acquisitions of TIO Networks, Xoom, Braintree/Venmo, Paydiant, Zong, and Modest. These transactions involved multiple disciplines, including payments regulation, telecommunications regulation and intellectual property rights, as well as support from multiple international offices, sometime requiring regulatory approvals on a multi-jurisdictional basis.
- Blackbaud acquisition of online fundraising services provider: Advised U.S.-headquartered Blackbaud, Inc. on its agreement to acquire UK-based online fundraising services provider JustGiving for an aggregate purchase price of £95 million.
- H.I.G. Capital European Partners LP disposal of fintech marketplace: Advised an affiliate of H.I.G. Capital European Partners LP on its disposal of Zmarta Group, a leading fintech marketplace in Northern Europe, to Bauer Media Group.
- Western Union acquisition of Travelex: Represented Western Union on merger control aspects of its acquisition of Travelex Global Business Payments, including merger control notifications in Australia, Cyprus, Malta, the UK and the U.S.
- Synchrony Financial and various matters: Represented Synchrony Financial in connection with several strategic investments in fintech companies, including LoopPay, Inc., an innovative mobile payments platform company.
COMMERCIAL TRANSACTIONS
- Counseling on licensing and outsourced services agreements.
- Advising on payment network sponsorship, participation and access agreements.
- Negotiating agreements for payment processing, merchant acquiring, electronic bill payment and funds transfer.
- Negotiating agreements for fintech product distribution and program management.
- Negotiating agreements for the hosting of payment products for mobile wallets.
- Assisting with acceptance agreements for new mobile and other new forms of payment.
- Counseling on forward flow purchase and asset-backed securitizations of loans originated via online lending platforms.
- Representative matters include:
- Mobil wallet provider: Advised a mobile wallet provider in connection with the development and implementation of its mobile payment and prepaid account product.
- Online marketplace lending platform: Served as issuer’s counsel for an online marketplace lending platform in sponsoring a rated securitization program involving a combination of loans sold by third-party whole loan investors, the originating bank and the marketplace platform.
- An investor in marketplace lending platform: Represented an investor in Prosper Marketplace’s $165 million Series D financing.
- Bank loan originator for marketplace lending platform: Represented the bank originating loans for a marketplace lending platform.
- Garrison Investment Group securitizations of marketplace lending platform loans: Acted as counsel to affiliates of Garrison Investment Group LP in $462,577,000 of asset-backed securitizations of unsecured consumer loans originated via the Prosper lending platform.
DATA PROTECTION AND CYBERSECURITY
- Advising on appropriate cybersecurity controls and incident response for sensitive data
- Handling crisis response to data breach incidents.
- Handling data breach litigation, such as actions involving coin theft, wallet design defects and related class actions.
- Counseling on privacy and data protection regimes, including the EU’s General Data Protection Regulation.
- Advising on data protection notifications, policies, consents and agreements.
- Counseling on legal requirements under U.S. state, U.S. federal and international data breach laws.
- Representative matters include:
- Big data analytics: Providing guidance to a leading big data analytics firm on a variety of projects, including the analysis of a large-scale financial services data analytics project in light of the Fair Credit Reporting Act, analysis of financial information for voter micro-targeting in EU elections, and integration of FCRA and non-FCRA data into complex cross-border projects implicating EU data protection issues.
- Management of entertainment industry residuals, royalties and other payments: Assisting an innovative SaaS platform used in the entertainment industry to manage residuals, royalties and other often small but complex payments for thousands of payees, with the appropriate restrictions on data flows as well as the company’s terms of service and privacy policy.
- Large financial transaction processor and banking and payments regulation and privacy and data security: Provided counseling and training to a large U.S. financial transaction processor on banking and payments regulation and privacy and data security in connection with its product development and key client transactions.
- Financial risk rating data analytics engine: Providing guidance to a company developing a new financial risk rating data analytics engine.
- Defective wallet litigation risks: Advising on litigation options after theft of virtual currency from an allegedly defective wallet.