As we approach the end of the year, here are the Top 10 posts on the Debevoise FinReg and FinTech Blog in 2023. If you are not already a Blog subscriber, click here to sign up.


1. Basel III Endgame Proposal Released Over Dissent (July 28, 2023)

After several years of anticipation, the Federal Reserve Board (“FRB”), Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency for comment a long-awaited proposal on the U.S.  implementation of the so-called Basel III endgame.  The FRB also issued a proposal related to the capital surcharge for the eight largest U.S.  global systemically important bank holding companies.  In this post, we highlight certain notable aspects of each proposal.


2. Banking Agencies Release Proposed Rules and Guidance on Long-Term Debt and Resolution Planning (August 31, 2023)

As previewed by banking agencies for over a year and with increased frequency after the recent bank failures, the Federal Deposit Insurance Corporation, the Federal Reserve Board and the Office of the Comptroller of the Currency in August 2023 issued three key proposals regarding minimum long-term debt requirements and resolution planning. In this post, we identify certain key observations, takeaways, and notable aspects of each proposal.


3. Key Takeaways from Bank Failure Reports (May 1, 2023)

As previewed in our client update, on April 28, 2023, three government agencies released reports reviewing the failures of SVB Financial Group and Signature Bank.  The Reports provide a detailed summary of the events and analysis, and include confidential supervisory information in the form of examination records, communications with examiners and supervisory analyses.  In this post, we outline key takeaways from the Reports that focus on the potential implications for banking organizations, including what the industry may expect in terms of supervisory posture and areas of heightened focus, impacts to growth strategies and regulatory reform.


4. Large Bank Oversight and M+A Ramifications from Recent Bank Failures (April 28, 2023)

The Silicon Valley Bank and Signature Bank failures (together, the “March Failures”) were the second- and third-largest commercial bank failures in U.S.  history.  Six weeks after the March Failures, bank stability issues continued to generate headlines, and healthy banks remained subject to depositor outflows.  This post seeks to assist Large Banks to prepare for the anticipated changes to the regulatory landscape by discussing possible supervisory questions that may arise (and some possible responses thereto) in the immediate term, as well as longer-term regulatory and industry challenges.


5. Bankruptcy Litigation Demonstrates the Extent of the Crypto Contagion (June 15, 2023)

In the wake of the industry’s 2022 “crypto winter,” which spiraled into a “cryptopocalyse,” industry watchers were focused on the contagion effect of the various crypto-related bankruptcy filings.  In this post, we examine interconnected nature of the cryptocurrency market played a significant role in the numerous bankruptcy filings by crypto-related entities and how several of the claims asserted against fellow debtor entities may be the largest sources of recovery in certain of these Chapter 11 cases, which could have a material impact on the distributions to creditors and link together the fates of different debtor entities.


6. FSOC Proposes New Framework for Financial Stability Risks and Guidance on Nonbank Financial Company Designations (May 22, 2023)

At the end of April 2023, the Financial Stability Oversight Council (“FSOC”) published for public comment two proposals that would make it easier for FSOC to designate nonbanks as systemically important financial institutions.  In this post, we (i) provide background that informs the issuance of the proposals, (ii) highlight certain key issues raised by the proposals (including notable changes between the proposals and existing legal and regulatory guidance) and (iii) discuss the potential impact that the proposals, if finalized, could have on nonbank financial companies.


7. DOJ Discusses New Framework for Evaluating Bank Mergers (Jun 23, 2023)

On June 20, 2023, Jonathan Kanter, the Assistant Attorney General for the Department of Justice’s Antitrust Division, gave a speech at the Brookings Institution outlining his thoughts on promoting competition in banking.  In this post, we discuss DOJ’s guidelines, its evolving practice of evaluating the competitive effects of bank mergers, and outlook for bank mergers going forward.


8. Cannabis Banking Legislation Advances out of Senate Banking Committee (October 10, 2023)

On September 27, 2023, Senate Banking Committee members advanced the Secure and Fair Enforcement Regulation (SAFER) Banking Act (S. 2860) out of committee for a full Senate vote. According to a joint statement by the sponsors of the bill, the SAFER Banking Act is intended to make “communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans,” and to prevent “federal bank regulators from ordering a bank or credit union to close an account based on reputational risk.”  In this post, we outline certain background information and provide a summary of key elements and implications of the bill.


9. The SEC’s First NFT Enforcement Action or Just Another ICO Case? (September 5, 2023)

On August 28, 2023, the SEC announced its first enforcement action against an NFT project, via a settled order as to Impact Theory, LLC (“Impact Theory”) for the offer and sale of unregistered securities.  However, absent from the order is any attempt to grapple with the unique issues presented by non-fungible tokens. In this post, we discuss the implications the order has, as well as the similarities and differences between this enforcement action and orders that the SEC has issued against fungible digital assets, notably in the agency’s initial coin offerings cases.


10. SEC Seeks to Expand “Investment of Money” to Include Social Media Posts (March 29, 2023)

On March 22, 2023, the Securities and Exchange Commission (“SEC”) filed a complaint against Justin Sun and his related companies, which included claims that he made offers and sales of unregistered securities.  Unlike most prior actions alleging that tokens were sold for cash or other cryptocurrency, the SEC alleged that some of the tokens were distributed by Sun to users in exchange for completing certain tasks, such as promoting the tokens on social media. The SEC argues that these distributions qualify as “investments of money,” one of the requirements to prove the existence of an investment contract under the Howey test.  In this post, we discuss how there are reasons to believe that the SEC is wrong, given the legal meaning of “investment” in the context of Howey.

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Author

Matthew Kaplan is the firm’s Chief Financial Officer, a member of the firm’s Management Committee and the Co-Head of the firm’s Capital Markets Group.

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Satish Kini is Chair of Debevoise’s Banking Group and a member of its Financial Institutions Group. Mr. Kini advises on a wide range of regulatory and transactional issues. He can be reached at smkini@debevoise.com.

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Gregory Lyons is a corporate partner and Co-Chair of the firm’s Financial Institutions Group. Mr. Lyons is also Chair of the New York City Bar Association Committee on Banking Law. His practice focuses on serving the needs of financial institutions, as well as private equity and other entities that invest in financial institutions, with a particular emphasis on domestic and cross-border bank regulatory, transactional and examination matters. He can be reached at gjlyons@debevoise.com.

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Jeffrey L. Robins is a corporate partner and a member of the Debevoise Banking Group. His practice focuses on representing broker-dealers, swap dealers, banks, securities exchanges, industry associations and buy-side institutions in regulatory and transactional matters. He can be reached at jlrobins@debevoise.com.

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Caroline Swett is a partner in Debevoise’s Financial Institutions and Banking Groups. She advises domestic and foreign banks and other financial institutions on a wide range of regulatory, enforcement and transactional matters. She can be reached at cnswett@debevoise.com.

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Morgan Hayes is a corporate partner and a member of the firm’s Capital Markets and Private Equity Groups. Mr. Hayes regularly represents issuers, private equity firms and underwriters in public and private offerings of debt and equity securities, and he also counsels public and private companies on disclosure, corporate governance, finance and general corporate matters. Mr. Hayes is recommended by The Legal 500 US (2023) for his capital markets practice. His recent experience includes acting for clients such as DoubleVerify, KKR, Morgan Stanley, Verizon Communications, Cornerstone Building Brands, Providence Equity Partners, Carlyle and Kelso & Company. He can be reached at mjhayes@debevoise.com

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Alison M. Hashmall is a counsel in the Debevoise's New York office and a member of the firm’s Financial Institutions and Banking Groups. Ms. Hashmall’s practice focuses on advising domestic and non-U.S. banking organizations and other financial institutions on a wide range of bank regulatory, policy and transactional matters. She can be reached at ahashmall@debevoise.com.

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Chen Xu is a corporate associate and a member of Debevoise's Financial Institutions Group. He can be reached at cxu@debevoise.com.

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ejas N. Dave is a corporate associate and a member of the Banking Group. He can be reached at tndave@debevoise.com

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Ezra Newman is a corporate associate and a member of the Financial Institutions Group. He can be reached at enewman@debevoise.com