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Joe Cutler's litigation work focuses on combating cybercrime and enforcing website terms of use.

On February 28, 2014, Mt. Gox, the oldest Bitcoin exchange, filed for bankruptcy reorganization under Japanese law, toppling from its place in the Bitcoin community to insolvency. This filing confirmed rumors of financial troubles spawned by Mt. Gox’s sudden suspension of trading on February 25 and focused increased legal scrutiny on Mt. Gox’s business practices.

Mt. Gox’s downward legal spiral began in May 2013, when the Department of Homeland Security seized $5.5 million in funds held in its U.S. subsidiary’s processing accounts for failure to register as a U.S. Federal Money Services Business. Until then, despite having experienced other losses due to security breaches and other technical failures, Mt. Gox had enjoyed a rapid rise in popularity to become the largest Bitcoin exchange in the world, at one point handling as many as 80% of Bitcoin trades worldwide. The negative press and loss of consumer confidence from the government seizure of Mt. Gox’s funds, combined with the rise of several strong market competitors cut down Mt. Gox’s market share significantly. However, despite its challenges, Mt. Gox continued to conduct approximately 34% of all Bitcoin exchange transactions in early February 2014.
Continue Reading Mt. Gox’s Legal Problems Lead to Bankruptcy and Increased Scrutiny

Riding the coattails of an August 6, 2013 federal court ruling that alleged Ponzi-schemer Trendon Shavers’ Bitcoin-based investment scheme constituted an investment contract, and therefore is a “security” under the federal securities laws, various federal and state lawmakers have aligned their attention to issues affecting the virtual currency market. Indeed, it now appears that Congress

In response to the SEC’s first civil complaint arising from online virtual currency trading,[1] alleged Bitcoin Ponzi schemer Trendon Shavers recently challenged the district court’s authority to hear the case. Shavers argued that the Bitcoin-related investments he solicited through his company, Bitcoin Savings and Trust, did not constitute “securities” as defined under the federal

On July 23, 2013, the SEC ventured into the electronic currency world by filing a civil complaint against virtual currency “trader” Trendon Shavers and his company, Bitcoin Savings and Trust, in the U.S. District Court for the Eastern District of Texas. In its complaint, the SEC alleged that Shavers carried out a Ponzi scheme by