International law firm McDermott Will & Emery assisted Atomyze LLC in obtaining a legal interpretive opinion from the State of California’s Department of Financial Protection and Innovation (DFPI) deciding that Atomyze can launch its blockchain business in California without obtaining a California money transmitter license.
DFPI concluded that Atomyze, a progressive digital asset company, does not need to obtain a money transmitter license under the California Money Transmission Act. Atomyze can now launch in the key jurisdiction of California.
Atomyze assists owners of large amounts of metal, primarily palladium and platinum, by creating groundbreaking digital assets—“Metal Asset Backed Tokens” or “Metal ABTs”—that represent interests in those metals. The metals backing the Metal ABTs are stored in secured vaults, and owners of Metal ABTs maintain the right to redeem those Metal ABTs for the actual physical delivery of the underlying metals. Atomyze facilitates the purchase and trading of Metal ABTs on its platform.
Providing technical services to assist in the creation of a Metal ABT . . . and issuing a digital wallet holding the Metal ABT does not require licensure.
The fiat currency-related services facilitating the sale of Metal ABTs . . . does not require licensure.
The Department does not require licensure under the MTA for Atomyze to facilitate the sale of Metal ABTs . . .
Jeanine Hightower-Sellitto, Atomyze CEO, commented: “The expertise that the McDermott team brought to our project is unparalleled. We have a unique and innovative platform for which we required our legal advisors to not only have a deep understanding of the regulatory landscape, but also the ability to navigate through a complex field of state licensing requirements. California is a key opportunity for Atomyze and the DFPI opinion is essential for our success. We thank John Lutz and his team for their successful efforts on this endeavor.”
The McDermott team’s primary task on behalf of Atomyze was to roll out Atomyze nationwide by obtaining state money transmitter licenses from each jurisdiction which required such a license for Atomyze’s blockchain business activities. McDermott is seeking money transmitter licenses in all of the necessary jurisdictions, along with “no action” and similar relief in other jurisdictions where the money transmitter regulatory regime is unclear for blockchain and digital asset companies.
“We are proud partners with Atomyze, who will revolutionize trading in precious metals,” John Lutz, McDermott partner, said.
“It is a rarity in this industry to bridge the gap between the physical world and blockchain and Atomyze presents a real use-case that could alter the way an entire asset class trades,” Joseph Evans, McDermott partner, added.
McDermott’s cross-disciplinary FinTech and Blockchain team understands the complex legal and business challenges that face industry participants and includes lawyers from across the Firm’s major practice areas, including corporate, finance, global privacy and cybersecurity, government and lobbying, intellectual property, litigation, technology and commercial transactions, and white-collar and securities defense. The team advises a broad range of FinTech businesses, including robo-advisors, high-frequency trading firms, broker-dealers, banks, private fund sponsors, technology startups and established financial-services enterprises and offer end-to-end counsel on products and services.
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