China is just two months away from enforcing a new data protection law that’s supposedly stricter than the GDPR. What does this mean for companies operating in and out of the country?
Also, why is the SEC unhappy with Coinbase’s latest offering? All this, and much more, when you scroll below 👇
1. China Gets Its Own GDPR
2. An Assistant To Help You Stay On Top Of Your Contracts
3. The SEC Plans To Take Coinbase To Court
4. A Guide To Building Business-centric In-house Legal Teams
5. Other stories shaking up the legal industry
China has passed the Personal Information Protection Law or PIPL, making it the country’s first comprehensive data protection law.
PIPL comes into effect on 1 November 2021, and will provide a framework for collecting, transferring, and processing of Chinese citizens' data.
PIPL borrows several elements from the EU’s GDPR with a major takeaway being the extraterritorial clause, which will enforce PIPL on companies operating inside and outside China.
Like the GDPR, PIPL also allows users to access, copy, correct, modify, and delete their personal information besides withdrawing consent to processing personal data.
The PIPL contains a few unique clauses of its own, such as:
Companies located outside China need to appoint an in-country representative to oversee PIPL compliance.
PIPL does not have a concept of legitimate interest, thus making it mandatory for companies to collect proper consent from users before they can access their personal data.
Finally, under PIPL, companies cannot refuse to do business with users who do not give their consent to data collection and processing.
PIPL will give the Chinese government greater control over cross-border data sharing and regulate foreign companies better.
As far as penalties go, non-compliance and violations of PIPL can attract fines worth RMB 50 million or 5% of the business’ annual turnover, besides revocation of rights to do business in the country.
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The US SEC sent a Wells notice to Coinbase, indicating the regulator’s intentions to sue the company if it were to launch its new financial product, Coinbase Lend.
Coinbase Lend allows customers to loan their USD Coin (USDC) balance in return for a 4% APY. USDC is a stablecoin created by Coinbase whose value is tied to the US Dollar and is relatively immune to price fluctuations.
The bone of contention is whether Coinbase Lend is a security or not. Coinbase argues that Lend is not an investment scheme, but instead a lending program that uses a customer’s existing USDC balance on the platform.
On the other hand, the SEC labels it as a security offering under the Howey and Reves tests, but did not provide any further clarification when requested.
Following this news, Coinbase’s stock has contracted by 8.84% since September 7. The general cryptocurrency market has also taken a hit, with Bitcoin, Ethereum, and other altcoins shedding between 10%-30% of value over the past week.
Many view this as the SEC’s effort to influence greater authority over cryptocurrency trading and lending while also safeguarding traditional investment avenues.
Meanwhile, Coinbase is not giving in easily, with CEO Brian Armstrong putting out a tweet saying, “If we end up in court we may finally get the regulatory clarity the SEC refuses to provide. But regulation by litigation should be the last resort for the SEC, not the first.”
Adam Glick, Intercom’s Head of Legal, is a staunch believer in keeping legal intervention in business matters to a minimum. This not only helps achieve business objectives quickly but also positions the legal team as a driver of growth within the organization.
India scraps the controversial retrospective tax law and agrees to refund Cairn Energy PLC $1 billion in outstanding claims.
El Salvador becomes the first country to recognize Bitcoin as an official legal tender, fueling mainstream cryptocurrency adoption in the process.
The EU proposes the world’s first AI Act that classifies AI systems, identifies risk and covers angles such as prohibitive practices, ethical standards, among other things.
Concerns for mental or brain privacy emerge as neurotechnologies, like Neuralink and others, take off.
US Federal Judge rules in favor of Epic Games and instructs Apple to ease App store rules regarding payment methods.
With that, we come to an end with this month’s SpotDigest. We’ll catch you in the next one, until then take care and stay well!