U.S. Developments Regulatory Updates SEC Continues to Delay Decision on Bitwise ETF On May 14, 2019, the U.S. Securities and Exchange Commission (“SEC”) continued its delay on a decision regarding a bitcoin exchange-traded fund (“ETF”) application. A decision regarding the ETF application, filed by Bitwise Asset Management and the NYSE Arca exchange earlier this year, … Continue Reading
U.S. Developments Regulatory Updates CFTC Publishes Enforcement Manual On May 8, 2019, the U.S. Commodity Futures Trading Commission’s (“CFTC”) Division of Enforcement (“DOE”) published its first public Enforcement Manual (the “Manual”). The Manual establishes general policies and procedures for the DOE’s work in investigating and prosecuting violations of the Commodity Exchange Act. Director of Enforcement … Continue Reading
U.S. Developments Regulatory Updates SEC Suspends Trading for Crypto Exchange and Mining Company On April 29, 2019, the U.S. Securities and Exchange Commission (“SEC”) announced that it was suspending trading for Bitcoin Generation (“BTGN”), a cryptocurrency exchange and mining company, until 11:59 p.m. ET on May 10, 2019, due to concerns about the accuracy and … Continue Reading
The Office of Foreign Assets Control (OFAC) administers and enforces U.S. economic sanctions programs in accordance with U.S. national security and foreign policy. OFAC had not previously published guidance addressing essential elements for an effective sanctions compliance program (SCP). It has now done so. Specifically, on May 2, 2019, OFAC published guidance entitled “A Framework … Continue Reading
U.S. Developments New York Attorney General Announces Filing in Connection with Tether, Bitfinex Investigation On April 25, 2019, New York Attorney General Letitia James announced that her office obtained a court order enjoining iFinex Inc., operator of the Bitfinex trading platform, and Tether Limited, issuer of “tether” virtual currency, from further violations of New York … Continue Reading
U.S. Developments Regulatory Updates Arca Investment Management Files With SEC to Issue Stablecoin Arca Investment Management, a California-based investment management firm specializing in digital assets, filed an amended preliminary prospectus with the SEC seeking to make available its Arca UST Coins to investors. The Arca U.S. Treasury Fund (“Fund”) would issue its shares as “Arca … Continue Reading
We can help. Perkins Coie has identified 34 factors in 5 overarching categories that shape the outcomes of successful enterprise consortia engagement efforts through its analysis of 71 consortia across 12 industries. Recently, Forbes published an article detailing the ways that large companies, including some of the best-known companies in tech, finance, manufacturing and retail, … Continue Reading
U.S. Developments Blockstack Files With SEC for Regulation A+ Token Sale Blockstack, the New York-based blockchain software provider, has announced that it intends to make a $50 million token offering that would use the SEC’s Regulation A+ exemption. The sale would enable Blockstack to raise capital through the U.S. securities markets via a subsidiary, Blockstack … Continue Reading
The U.S. Securities and Exchange Commission (SEC) Strategic Hub for Innovation and Financial Technology (FinHub) published a framework on April 3, 2019, for analyzing whether a digital asset is offered and sold as a security under the federal securities laws. The framework includes “common sense guidance” that provides greater detail and clarity regarding the application … Continue Reading
U.S. Developments Regulatory Updates SEC Releases “No-Action Letter” Stating Turnkey Jet ICO Tokens Are Not Securities and Releases “Framework for ‘Investment Contract’ Analysis of Digital Assets” The U.S. Securities and Exchange Commission (SEC) Strategic Hub for Innovation and Financial Technology (FinHub) published a framework on April 3, 2019, for analyzing whether a digital asset is … Continue Reading
U.S. Developments Regulatory Updates SEC’s Valerie Szczepanik Speaks at SXSW The U.S. Securities and Exchange Commission’s (“SEC”) Associate Director of the Division of Corporation Finance and Senior Advisor for Digital Assets Digital and Innovation, Valerie Szczepanik, participated in a Q&A session at the South by Southwest (SXSW) conference in Austin, Texas. Szczepanik spoke on a … Continue Reading
U.S. Developments Regulatory Updates SEC Chairman Clayton Explains that an Asset Can Lose Its Status of Being Labeled a Security U.S. Securities and Exchange Commission (“SEC”) Chairman Jay Clayton appears to have confirmed SEC-staff analysis of the classification of decentralized digital assets. Last year, SEC Director of Corporation Finance William Hinman said during a speech … Continue Reading
U.S. Developments Denver to Implement Blockchain-Based Elections for Overseas Voters Denver moves to become the second U.S. jurisdiction to implement a blockchain-based voting system for overseas voters. Active duty military and other eligible overseas voters will be able to use a mobile phone application in the next election to cast their vote on municipal issues. … Continue Reading
U.S. Developments Regulatory Updates CFTC Plans Public Meeting Addressing Fintech, Including Blockchain Technology On March 27, 2019, the Commodity Futures Trading Commission (CFTC) Technology Advisory Committee will host a public meeting at the CFTC headquarters in Washington, DC. The Technology Advisory Committee plans to use the meeting to listen to presentations and consider actionable recommendations … Continue Reading
Cryptocurrency owners must face death—be it their own, or that of anyone else with custody of the owner’s cryptocurrency or other digital assets. We received a stark reminder of this when the Canadian exchange QuadrigaCX recently filed court papers[1] indicating it may have lost access to nearly $200 million USD of its customers’ Bitcoin, Ether … Continue Reading
U.S. Developments Regulatory Updates SEC Settles Enforcement Action with Gladius Network On February 20, 2019, the U.S. Securities and Exchange Commission (“SEC”) announced the settlement of charges against Gladius Network LLC (“Gladius”) for conducting an unregistered securities offering. Gladius conducted a presale and public sale of digital tokens called “GLA” in late 2017, raising approximately … Continue Reading
U.S. Developments Regulatory Updates SEC Commissioner Peirce Says Guidance on Crypto Token Sales Is Coming In a speech at the University of Missouri School of Law, Hester Peirce, one of the SEC’s commissioners, said that the agency is working on “supplemental guidance” to help projects determine when securities laws might apply to crypto token sales. … Continue Reading
The Ethereum Classic blockchain was the victim of a 51% attack (often called a majority or Sybil attack) last month that reorganized portions of the blockchain and allowed the attackers to double-spend 219,500 ETC ($1.1 million). As a result of this attack, and similar majority attacks over the past year, the concept of immutability within … Continue Reading
The International Swaps and Derivatives Association (ISDA) has published the first in a series of guidelines for what it colloquially refers to as “smart derivatives contracts” (the Guidelines).* A smart derivatives contract is a derivative that incorporates software code to automate aspects of the derivative transaction and operates on a distributed ledger, such as a … Continue Reading
U.S. Developments Florida Court of Appeals Rules That Direct Sales of Bitcoin Constituted Money Transmission and the Sale of Payment Instruments Reversing the order issued by the Miami-Dade County Circuit Court, the Florida Court of Appeals issued an opinion on January 30 in the case of Florida v. Espinoza in which the appellate court ruled … Continue Reading
Arizona’s financial technology (“fintech”) sandbox (“Sandbox”), the first of its kind in the United States, has been open for several months and has accepted three participants. A month after the program’s launch, Arizona’s Attorney General announced his approval of the first participant, payment platform Omni Mobile, Inc.[1] Two other companies providing consumer lending services, Sweetbridge … Continue Reading
U.S. Developments Kik Publicizes Response to Possible SEC Enforcement On January 27, the Wall Street Journal published an article describing the impending legal battle over cryptocurrency Kin and its 2017 ICO. That same day, Ted Livingston, the founder and CEO of Canadian company Kik Interactive (Kik) and the developer behind Kin, published the Wells Notice … Continue Reading
U.S. Developments Cboe Withdraws and Then Submits a Proposed Rulemaking for a Bitcoin ETF On January 22, 2019, Cboe BZX Exchange (Cboe) withdrew its proposed rulemaking with the U.S. Securities and Exchange Commission (SEC). Had the proposal been approved, Cboe would have been allowed to list shares of bitcoin electronically-traded funds (ETFs) backed by VanEck … Continue Reading
U.S. Developments Flood of State Virtual Currency Legislation Since the start of the new year there have been roughly nine virtual currency bills introduced or passed in four different states. Overall, the bills demonstrate a growing interest among the states in supporting virtual currency businesses through the codification of blockchain terminology for legal effect or … Continue Reading
