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Token Alliance Releases 2019 Edition of Best Practices Guide For Digital Tokens – AML Guidelines: O’Melveny Lawyers Serve As Expert Contributors

September 12, 2019

As US and international regulation of digital tokens evolves, token issuers and trading platforms continue to seek clarity on how to be compliant within a developing legal framework. Recognizing this uncertainty, the Token Alliance, an industry-led initiative of the Digital Chamber of Commerce, has released a series of reports studying the overall regulatory and market landscape of the token ecosystem and proposing guidelines in certain legal areas. This week, the Chamber released “Understanding Digital Tokens: Guidelines for Anti-Money Laundering Compliance and Combatting the Financing of Terrorism.”

The report provides an overview of US laws that aim to prevent money laundering and the financing of terrorists (CFT), explains how companies subject to these laws establish anti-money laundering (AML) compliance programs, and proposes a set of guidelines for token sponsors and token trading platforms to consider when crafting AML and CFT compliance programs.

A global working group of experts from throughout the blockchain ecosystem contributed to the report, including O’Melveny’s Steve Bunnell and Laurel Loomis Rimon, whom the Token Alliance named expert contributors. O’Melveny is a member of the Token Alliance, and our lawyers have contributed to previously released guidelines on Securities & Non-Securities Tokens and Consumer Protection.

The best practices reflected in the report do not carry the weight of law or constitute specific legal advice, but may be helpful for prospective token issuers and associated parties in consultation with their legal counsel and other advisors.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Steve Bunnell, an O’Melveny partner licensed to practice law in the District of Columbia, and Laurel Loomis Rimon, an O’Melveny senior counsel licensed to practice law in California and the District of Columbia, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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