Category: Litigation and Decisions

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California Legislature Fast-Tracks a Bill Creating Enrollment Procedure and Enforcement Authorization for Digital Currency Companies, Leaving Several Important Questions Unresolved

This week, at the tail-end of the legislative session, California legislators have introduced a bill (amended from a bill originally introduced in April 2015) that statutorily addresses the increasingly topical question of how to regulate the emerging crypto-currency market. The amendment, introduced on August 8, 2016, is a vast departure from the earlier iterations of … Continue Reading

Florida State Court Order In Espinoza Case Raises Questions About Classification of Bitcoin Under Florida Law

Despite much hype over the ruling by a Florida court that bitcoin is not money, the likeliest outcome of Monday’s decision will be legislative amendments to Florida’s money transmitter laws, rather than the sweeping impact envisioned by some. Florida state Judge Teresa Pooler dismissed charges on Monday against a man accused of  money laundering and … Continue Reading

Making Sense of the CFTC’s Enforcement Order and Settlement with Bitfinex

On June 2nd, the U.S. Commodity Futures Trading Commission (the “CFTC”) announced an enforcement order and settlement with BFXNA Inc. d/b/a Bitfinex, an online platform for exchanging and trading cryptocurrencies (the “Platform”).  This posting will summarize that order with the goal of helping our readers make sense of the current state of the law with respect to … Continue Reading

Federal Authorities Announce Settlement with Ripple Labs Inc. Resolving Investigation

Federal authorities announced this week a settlement with Ripple Labs Inc. and its subsidiary, XRP Fund II, resolving an investigation by FinCEN and the Department of Justice into violations of the Bank Secrecy Act.  The settlement generally calls for the company to pay $700,000 in fines and forfeitures, to move Ripple Trade (a version of … Continue Reading

Mt. Gox – Bankruptcy Hearings Next Week Should be Interesting

Tuesday evening, the Plaintiffs in the Illinois Class Action litigation filed motions with the U.S. Bankruptcy Court in Dallas asking that court to terminate the temporary stay it recently granted to Mt. Gox. They also asked that Robert Marie Mark Karpeles (the Foreign Representative for Mt. Gox) be ordered to provide testimony under oath in … Continue Reading

Mt. Gox’s Japanese Bankruptcy and U.S. Chapter 15 Case – Implications For Creditors

Introduction Mt. Gox has filed a civil rehabilitation proceeding under Japanese law, and subsequently filed a companion case in Dallas, Texas under Chapter 15 of the U.S. Bankruptcy Code. The U.S. Bankruptcy Court issued an initial stay (injunction) to protect Mt. Gox and its U.S. assets from actions by creditors and set a hearing for … Continue Reading

Two Florida Users of Localbitcoins.com Arrested for Money Laundering and Unlicensed Money Transmission

Two users of Localbitcoins.com, Pascal Reid and Michell Espinoza, were arrested last week in what appears to be the first case where bitcoin sellers have been prosecuted under state anti-money laundering and money transmission laws.  These arrests illustrate that under some state money transmitter laws, the direct sale of bitcoin can constitute money transmission—and that … Continue Reading

New Jersey AG Enters Settlement with Website that Exploited its Users’ Computers for Bitcoin Mining

On November 19, the New Jersey Attorney General entered into a $1,000,000 settlement with E-Sports, a website that had allegedly deployed malicious software onto its own users’ computers, creating a virtual network to mine bitcoins. The AG asserted claims for deceptive and unconscionable commercial practices under the New Jersey Consumer Fraud Act, N.J. Stat. § … Continue Reading
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