Category: Consumer Protection

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CFTC Files Charges in Bitcoin Ponzi Scheme

On September 21st, the Commodity Futures Trading Commission (CFTC) announced the filing of charges against Nicholas Gelfman and Gelfman Blueprint, Inc. (the “Defendants”) for fraud, misappropriation, and issuing false account statements in connection with solicited investments in Bitcoin.  According to the allegations asserted by the CFTC, the Defendants operated a Ponzi scheme, misappropriated funds from … Continue Reading

Guilt by Association: Bitcoin and the WannaCry Ransomware Attack

The recent so-called “WannaCry” ransomware cyber-extortion attack has thrust bitcoin as a means of payment back into the debate surrounding illegal online activity. Much in the way that the internet, in its early days, was seen as a tool useful only for crime, pornography, and other socially unacceptable activities, so too are bitcoin and other … Continue Reading

Blockchain Week in Review – February 17, 2017

Below is a summary of some of the significant legal and regulatory actions that occurred over the past week. This alert is not intended to be a comprehensive list of all such developments, but rather a selection of publicly-reported news that may be of particular interest. U.S. Developments California and New York Take Divergent Approaches … Continue Reading

NYDFS Issues Revised Proposed Cybersecurity Regulation

On December 28, 2016, the New York State Department of Financial Services (NYDFS) issued a revised proposed cybersecurity regulation, Cybersecurity Requirements for Financial Services Companies.  The revised proposed regulation reflects several substantive changes made in response to over 150 public comments received by NYDFS in response to the original proposed regulation published this past September. … Continue Reading

Blockchain Week in Review – October 14, 2016

Below is a summary of some of the significant legal, regulatory and industry actions that occurred over the past week. This alert is not intended to be a comprehensive list of all such developments, but rather a selection of publicly-reported news that may be of particular interest. U.S. Developments Regulatory Developments CFPB Declines to Make … Continue Reading

CSBS Model Virtual Currency Advisory: DO YOUR HOMEWORK! Maryland and Nevada Release Their Own Similar Advisories

Last week, the Conference of State Bank Supervisors (CSBS) and the North American Securities Administrators Association (NASAA) released model consumer guidance that they jointly developed to assist state regulatory agencies in providing consumers with information about virtual currency and factors consumers should consider when transacting with or investing in virtual currency.  Within days of the … Continue Reading

Washington Consumer Alert

The Washington State Department of Financial Institutions (“DFI”) issued a consumer alert warning of the risks of holding virtual currencies for investment or as a currency.  The Washington DFI specifically called out virtual currency’s volatility, lack of backing or guarantee, connection to criminal activity and potential tax repercussions.  This warning is the Washington DFI’s second … Continue Reading

Texas Cease and Desist Order

On March 10, the Securities Commissioner of the State of Texas issued an emergency order against Balanced Energy, LLC (“BE”), ordering it to immediately cease and desist its sale of working interests in oil wells (“C&D”). The primary basis for the C&D appeared to be that the working interests constituted unregistered securities, and that by … Continue Reading

New York BitLicense Order

On March 11, the New York State Department of Financial Services issued an Order announcing that that it “will consider formal proposals and applications in connection with the establishment of regulated virtual currency exchanges operating in New York.”  While the Order itself is silent on timing, an accompanying press release makes clear that the NYDFS … 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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