Overview
International law firm McDermott Will & Emery has secured “no-action” relief on behalf of its client Xcalibra, confirming that Xcalibra does not require a Colorado Money Transmitter License and is permitted to immediately launch its cryptocurrency exchange in the state of Colorado. This ruling clears a significant regulatory and licensing barrier for Xcalibra to operate the exchange across the country.
Xcalibra, an international cryptocurrency exchange, is registered as a money service business with the US Department of the Treasury Financial Crimes Enforcement Network (FinCEN) and recently obtained licensure from Swiss regulators to operate in the European Union.
McDermott is spearheading Xcalibra’s nationwide rollout, seeking money transmitter licenses or “no-action” letters across the country. Obtaining a no-action letter was the first pivotal step in Xcalibra’s nationwide licensing plan. McDermott argued that licensure is not required because Xcalibra operates a cryptocurrency spot market and users are not permitted to transfer cryptocurrency or fiat directly to and from one another. McDermott also argued that Xcalibra should not be required to obtain a license to permit customers to deposit and withdraw fiat currency because those transactions were ultimately for the purpose of purchasing and selling cryptocurrency. Colorado agreed.
The Colorado Division of Banking issued a novel “no action” letter permitting Colorado residents to immediately gain access to Xcalibra’s advanced cryptocurrency exchange. “The cryptocurrency industry is maturing, and it is incumbent on cryptocurrency lawyers to work with federal and state regulators to continue to sculpt the regulatory landscape. Certain regulators are becoming increasingly supportive of safe and compliant cryptocurrency platforms like Xcalibra, and we will continue to advocate for those organizations,” said Joseph (Joe) B. Evans, lead McDermott Partner for Xcalibra.
“We are impressed by Colorado’s thoughtful decision to open its doors to Xcalibra,” Joe added. “The Division of Banking took a progressive approach in considering and granting our ‘no-action’ application. We look forward to rolling out Xcalibra across the United States.”
“Colorado is a booming economy, and I’m glad that we’re able to steward the cryptocurrency and blockchain industry in the state. Our cryptocurrency exchange is now ‘Radofied’ and will be able to bridge direct USD trading in Colorado with the top cryptocurrencies of the world,” said Daniel Dabek, founder of Xcalibra. “This is a huge step towards our goal of offering global cryptocurrency trading.”
The McDermott team included Joseph B. Evans, Benjamin Strauss, Jonathan Kim and Brandon White.
McDermott’s FinTech and Blockchain team represents clients in all aspects of cryptocurrency law, disputes and transactions. McDermott has represented clients in high-stakes cryptocurrency litigation and government investigations, innovative transaction structures and regulatory strategy; the Firm regularly advises on licensing and regulatory issues, including (but not limited to) money transmitter regimes, securities law, commodities law, insurance and tax. McDermott also represents cryptocurrency and blockchain clients in connection with fundraising and investments, funds, novel structured finance transactions and first-of-their-kind platform formation. McDermott’s cross-practice group has key persons in virtually all practice areas and jurisdictions who focus primarily or exclusively on the fintech and blockchain industry.
About McDermott
McDermott Will & Emery partners with leaders around the world to fuel missions, knock down barriers and shape markets. Our team works seamlessly across practices, industries and more than 20 locations to deliver highly effective—and often unexpected—solutions that propel success. More than 1,200 lawyers strong, we bring our personal passion and legal prowess to bear in every matter for our clients and the people they serve.
