U.S. Developments VanEck and SolidX to Offer Bitcoin ETF to Qualified Institutional Buyers On September 3, 2019, VanEck Securities Corp. and SolidX Management LLC announced that they are seeking to use Rule 144A of the Securities Act to issue shares in the VanEck SolidX Bitcoin Trust to qualified institutional buyers. According to a joint statement … Continue Reading
U.S. Developments Enforcement and Litigation Developments Craig Wright Faces Sanctions Craig Wright, the self-proclaimed inventor of Bitcoin, has been tied up in litigation since February 2018 related to his partnership with the late David Kleiman. The case alleged that Wright worked to seize bitcoin owned by Kleiman after his death. On August 27, 2019, in … Continue Reading
U.S. Developments Veritaseum Founder Provides Response to Asset Freeze Order Responding to an emergency application filed by the Securities and Exchange Commission, Judge LaShann DeArcy Hall of the United States District Court for the Eastern District of New York issued an order on August 12, 2019, freezing Veritaseum accounts and digital assets and ordering founder … Continue Reading
U.S. Regulatory Kik Files Answer to SEC Complaint On August 7, Canadian messaging company Kik Interactive Inc. (“Kik”) filed its answer to the U.S. Securities and Exchange Commission’s (“SEC”) complaint filed in the Southern District of New York. In its 131-page answer, Kik argues for a narrow reading of the Howey test and maintains that … Continue Reading
U.S. Developments Regulatory Developments Commissioner Hester Peirce Speaks Before the SUSS Convergence Forum: Inclusive Blockchain Finance, and Emerging Technologies On August 1, 2019, Securities and Exchange Commission (“SEC”) Commissioner Hester Peirce gave a speech before the Singapore University of Social Sciences Convergence Forum: Inclusive Blockchain, Finance, and Emerging Technologies. In her remarks, she discussed the … Continue Reading
U.S. Developments Regulatory Developments SEC Issues Second No Action Letter for Blockchain-Based Project On July 25, 2019, the staff of U.S. Securities and Exchange Commission (SEC) issued its second ever no-action letter to a company planning to issue blockchain-based tokens. The letter was issued to Pocketful of Quarters (PoQ), a gaming start-up. PoQ seeks to … Continue Reading
U.S. Developments Legislative Updates Facebook’s David Marcus Testifies Before Congress on Libra David Marcus, the Facebook blockchain chief in charge of its planned Libra cryptocurrency and Calibra-branded digital wallet, testified for two days before Congress last week to answer questions about the social media giant’s plans for a cryptocurrency. U.S. Senator Mike Crapo, Chairman of … Continue Reading
U.S. Developments Regulatory Developments SEC and FINRA Issue Joint Statement on Digital Asset Custody Issues On July 8, 2019, the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) (collectively, “the Staffs”) issued a joint statement addressing questions each has received from market participants regarding proper custody of digital assets under … Continue Reading
U.S. Developments Regulatory Developments CFTC Announces Two Events Designed to Encourage FinTech Innovation On June 27, 2019, the Commodity Futures Trading Commission (“CFTC”) announced two events designed to encourage fintech innovation. First, the agency announced the launch of LabCFTC Accelerator. According to the press release, “LabCFTC Accelerator is a component of the broader CFTC’s LabCFTC … Continue Reading
U.S. Developments Facebook Announces Formation of Calibra and Launch of Libra On June 18, 2019, Facebook announced the launch of Libra, a new cryptocurrency designed to have a stable value and be widely accepted internationally, and the formation of a new subsidiary, Calibra, which will provide digital wallets and other services for users in the … Continue Reading
U.S. Developments Regulatory Developments SEC Chair’s Recent Comments on Digital Assets Securities and Exchange Commission (“SEC”) Chairman Jay Clayton touched on digital asset issues during two recent appearances. On June 4, Chairman Clayton addressed the Mid-Atlantic Regional Conference, where he noted the work of SEC staff to trace transactions across blockchains. Specifically, he mentioned that … Continue Reading
U.S. Developments SEC Sues Social Media Company Kik over Digital Coin Offering The Securities and Exchange Commission (“SEC”) sued Kik Interactive Inc. (“Kik”) in federal court in Manhattan this week, arguing that Kik’s sale of “Kin tokens” in late 2017 was a sale of unregistered securities. The complaint alleges that Kik marketed its tokens as … Continue Reading
U.S. Developments U.S. Federal Regulatory Developments SEC Staff Holds FinTech Forum to Discuss Blockchain Technology and Digital Assets On May 31, 2019, the staff of the U.S. Securities and Exchange Commission (“SEC”) held a FinTech Forum to discuss distributed ledger technology and digital assets. It was hosted by the SEC’s Strategic Hub for Innovation and … Continue Reading
U.S. Developments Regulatory Updates SEC Files Enforcement Action Against Alleged Fraudulent Cryptocurrency Pyramid Scheme On May 22, the Securities and Exchange Commission (“SEC”) filed a complaint in the U.S. District Court for the Central District of California against Daniel Pacheco, owner of two California-based companies known as IPro Solutions LLC and IPro Network LLC (collectively, … Continue Reading
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
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
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
