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Regulators prepare for innovation in distributed ledger technology

Overview

Regulators across the globe are considering how existing regulations may accommodate the development of new distributed ledger technologies ("DLT") (also known as "blockchain"). In just the first two months of 2017, the U.S. Financial Industry Regulatory Agency, the European Securities and Markets Authority, and the International Organizations of Securities Commissions all have issued reports on DLT. The reports explain that integrating novel DLT products into existing regulatory regimes may prove challenging as DLT continues to develop. DLT market participants should pay close attention as regulators prepare to address perceived weaknesses or potential risks relating to blockchains in their regulatory frameworks, and be ready to voice any concerns to, or discuss potential DLT benefits with the relevant authorities. FINRA has requested comments on its report, which are due March 31, 2017.

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