Category: Blockchain & Cryptocurrency Law
Not So Fast: District Court Balks at SEC’s Blanket Characterization of Tokens as Securities
An issue of major importance to cryptocurrency and digital token markets has been whether tokens were all to be considered securities under U.S. law. The SEC’s frequent admonishments that it would consider ICOs to be securities offerings has caused a dramatic slowdown in the U.S. ICO market. In one of the first cases to test… Read More
ICOs Involving Non-Issued Cryptocurrency May Be Prosecuted Under Federal Securities Laws
This week, a federal district court in New York was the first to decide that federal securities laws may be used to prosecute fraud involving cryptocurrencies. In United States v. Zaslavskiy, Eastern District Judge Raymond Dearie held that the Securities Exchange Act of 1933 (“Exchange Act”) and Securities Act of 1933 (“Securities Act”) are broad… Read More
Cryptocurrency Exchanges Must Navigate An Outdated Regulation System
More consumers are adopting cryptocurrency than ever, but regulators are less enthusiastic. As a result, cryptocurrency exchanges spend unnecessary time and resources working to comply with outdated guidelines. Kraken, which oversees $150 million in daily cryptocurrency transactions, is the latest exchange to experience this problem. In an effort to bring itself into compliance with current… Read More
How to Raise Capital Through Registration Exempt ICOs
The SEC has strongly indicated that initial coin offerings (ICOs) will be treated as securities, and thus must comply with various registration and disclosure requirements before being used to raise capital. Companies do have, however, several options for possible exemptions from the regulatory requirements that apply to registered public offerings. This chart outlines potential exemptions… Read More
New York AG Puts Crypto Exchanges in the Crosshairs
Following on the heels of the SEC’s announcement of subpoenas to crypto exchanges and token issuers, yesterday New York Attorney General Eric Schneiderman announced “the Virtual Markets Integrity Initiative,” which he described as “a fact-finding inquiry into the policies and practices of platforms used by consumers to trade virtual or ‘crypto’ currencies like bitcoin and… Read More
If ICOs are Securities: What Cryptocurrency Issuers, Exchanges and Gatekeepers Need to Know.
As predicted, the Securities and Exchange Commission (SEC) has taken additional steps to clamp down on the exploding ICO market: yesterday the Wall Street Journal reported the agency had issued “dozens of subpoenas and information requests to technology companies and advisors.” After repeated warnings from regulators like SEC Chairman Jay Clayton, the SEC is now sending… Read More
Full Metal Cryptojacket
In retrospect, it all seems so predictable. International capitalism creates virtual currencies. Banks are avoided. Millennials hail a new world order of anonymous or nearly untraceable market transactions. Numerous parties and exchanges hold on to large quantities of virtual currencies. But then the bad guys show up. And I’m not talking about the regulators. Last month, in what looks like the… Read More
Coming Soon: Digital Asset Regulation
In January, Bitcoin dropped to approximately 50% of its 2017 peak price. Other digital currencies saw similar declines. Most market observers blamed these massive price fluctuations on related events: (i) widespread reports of fraud and price manipulation, and (ii) increasing prospects for the regulation of digital assets and currencies. Indeed, 2018 has brought us federal… Read More
Social Media’s Hesitation to Promote Cryptocurrencies Explained
In a paradox of sorts, cryptocurrency’s continued survival may hinge on its submission to greater regulatory oversight. Such a notion is paradoxical in the sense that cryptocurrency’s origins can be traced to a “stick it to the man” mentality in which currency is decentralized and not tied to any one governmental body. Thus, submitting to… Read More
2018: The End of Cryptocurrencies?
Cryptocurrencies (e.g. Bitcoin) took the broader public by storm in 2017 and had a breakout year. There were outsized and even unprecedented returns, along with extreme volatility and even more extreme volatility. The question for 2018 is whether cryptocurrencies had their “fifteen minutes of fame” or they are here to stay? Blockchain technology (which is… Read More
