Federal District Court Upholds Securities Indictment for ICOs but Defers Final Howey Determination in United States v. Zaslavskiy This week, liberal pleading standards were applied to uphold the indictment in United States v. Zaslavskiy, the first criminal case examining whether ICOs are securities under U.S. law.… Continue Reading
On August 7, Judge Richard Seeborg of the U.S. District Court for the Northern District of California denied in part a motion to dismiss (the “Order”) sought by the defendants in In Re Tezos Securities Litigation (the “Tezos Case”). Among other important insights, the Order’s reasoning illustrates the potentially broad reach of the U.S. federal … Continue Reading
U.S. Developments Regulatory Updates Ohio Enacts Cybersecurity Law with addition of Blockchain to Ohio’s Uniform Electronic Transactions Act… Continue Reading
On July 26, 2018, the U.S. Securities and Exchange Commission (“SEC” or “Commission”) issued an order, by a 3-1 vote, disapproving a proposed rule change (the “Proposal”) that would have allowed for a bitcoin exchange-traded product (“ETP”) (the “Order”). In the Order, the SEC re-asserted many of its prior concerns and reasons for denying the same proposal … Continue Reading
On July 26, 2018, the U.S. Securities and Exchange Commission (“SEC” or “Commission”) issued an order disapproving a proposed rule change that would have allowed for a bitcoin exchange-traded product (“ETP”) (the “Order”). However, the Order was not unanimous amongst the SEC’s Commissioners. Commissioner Hester M. Peirce issued a stand-alone dissent against the Order, arguing that the … Continue Reading
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
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
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 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 filed a motion requesting the U.S. Bankruptcy Court’s approval of the form of the official notification of the May 6 recognition hearing as well as approving the service via email. The motion also seeks to establish a deadline of seven days before that hearing for any party to object to the request for … Continue Reading
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
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 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
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
