USA Law and Practice Contributed by: Gregory Strong, Sarah W. Chen, Brian Farber and Amil Sumaiya Malik, Cahill Gordon & Reindel LLP
Colorado, as have data breach reporting statutes. Although these laws do not specifically apply to the use of blockchain-based products or services, they contribute to an increasingly fragmented, state-level regulatory framework in the absence of a comprehen- sive federal regime. 1.1.4 Smart Contracts The general view in the US legal community is that pri- vate contractual arrangements that are executable, in whole or in part, using blockchain or distributed ledger technology are valid and enforceable, assuming the elements necessary to form a contract are present – offer, acceptance, the intention to be legally bound and consideration. Whether a smart contract is coded to reflect the intentions of the parties is a separate fact-specific question. 1.1.5 Industry and Trade Bodies There are no self-regulatory organisations in the USA specifically dedicated to blockchain or digital assets. There are a variety of trade groups dedicated to block- chain and digital assets, but none of them performs a formal regulatory or even quasi-regulatory function. Instead, these trade groups advocate on behalf of their members with respect to the adoption and regulation of blockchain technology and digital assets. There are, however, self-regulatory organisations associated with the securities and commodities industries that do have regulatory authority that may be relevant to blockchain and digital assets under certain circum- stances, and these are discussed below. The Financial Industry Regulatory Authority (FINRA) FINRA is a government-authorised organisation tasked with the oversight of US-registered securi- ties broker-dealers to ensure that they operate fairly and honestly. FINRA works under the supervision of the SEC and writes rules governing the activities of broker-dealers, examines broker-dealers for compli- ance with those rules, promotes market transparency to protect market integrity, and provides investor edu- cation. FINRA has taken a specific interest in activities involv- ing digital assets. It joined the SEC in putting out a joint statement regarding broker-dealer custody of
digital asset securities in July 2019. The release was withdrawn in May 2025. The National Futures Association (NFA) The NFA is an industry-wide self-regulatory organisa- tion for the commodity derivatives industry. It is a reg- istered futures association designated by the CFTC and registers a number of different participants in the commodities derivatives markets. The NFA’s focus is to safeguard the derivatives markets, protect inves- tors and ensure that members meet their regulatory responsibilities. Trade Associations There are a variety of trade associations in the United States that represent participants in the blockchain and digital assets space, including: • the Crypto Council for Innovation; • the Digital Chamber of Commerce; • the Blockchain Association; • the Global Blockchain Business Council; and • the Wall Street Blockchain Association. 1.2 Crypto-Assets 1.2.1 Property Considerations There is no definitive statutory or judicial framework governing how ownership of a digital asset is deter- mined in the USA. In practice, though, control over the private key associated with a digital asset is often treated as evidence of ownership. However, ownership ultimately depends on the legal relationship between the parties, including custodial arrangements and contractual terms, which may diverge from on-chain control. That said, there are many instances in which the owner of a digital asset transfers control to a third party in order for the third party to perform a certain function, in which case the owner may retain its own- ership right to the asset pursuant to the contractual terms of the owner’s agreement with the third party. Digital assets may be used as collateral in the USA. To that end, lenders may attempt to perfect a security interest in a digital asset pledged as collateral under the applicable provisions of the Uniform Commercial Code (UCC) — a model statute drafted by the Uniform Law Commission (ULC). Transacting parties typically structure the arrangement as a “security entitlement”
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