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
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
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
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
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
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 SEC Remarks on International Virtual Currency Enforcement On December 5, 2018, Steven Peikin, Co-Director of the Division of Enforcement at the U.S. Securities and Exchange Commission (“SEC”), gave a speech at the IOSCO/PIFS-Harvard Law School Global Certificate Program for Regulators of Securities Markets on the topic of international cooperation in the enforcement of … Continue Reading
U.S. Developments Regulation Upcoming Bitcoin exchange-traded funds (“ETF”) Decisions On January 4, 2018, NYSE Arca filed a proposed rule change to list 9 Bitcoin ETFs. Subsequently, the time for the Security Exchange Commission (“SEC”) to approve or disapprove was pushed back in March, April, July, and September. On August 22, 2018, the SEC disapproved the … Continue Reading
U.S. Developments The Federal Reserve Maintains Skepticism of Cryptocurrency Bitcoin On the eve of the 10-year anniversary of Bitcoin’s Whitepaper, Chairman of the Federal Reserve Janet Yellen stated that she does not recognize cryptocurrencies as legitimate currencies to be used anywhere in the global economy. The Chairman used bitcoin as an example and said that … Continue Reading
U.S. Developments Regulatory Updates FATF Issues Virtual Currency Guidance On October 19, the Financial Action Task Force (“FATF”) published the outcomes of its Plenary meeting. Included in the outcomes of the meeting were new recommendations related to the regulation of virtual currency (the “2018 Virtual Currency Recommendations”). In addition to the 2018 Virtual Currency Recommendations, … Continue Reading
U.S. Developments Regulatory Updates FinCEN Issues Advisory on Illicit Iranian Activities On October 11, 2018, the U.S. Treasury Department Financial Crimes Enforcement Network (“FinCEN”) issued an advisory to help money services businesses and foreign financial institutions better understand the U.S. Anti-Money Laundering/Combating the Financing of Terrorism (“AML/CFT”) risks related to Iranian activity. The report encourages … Continue Reading
U.S. Developments Federal Bank Regulators Issue Joint Statement on Collaborative BSA/AML Compliance On October 3, 2018, a group of federal bank regulators and the Financial Crimes Enforcement Network (“FinCEN”) announced in a joint statement that banks and credit unions could collaborate and share resources to manage their Bank Secrecy Act (“BSA”) and anti–money laundering (“AML”) … Continue Reading
The following summary is available in our sister blog, The Fintech Report. Roundup of CFTC Resources Blockchain Week in Review: Week of September 24-28, 2018 U.S. Developments Cryptocurrency and the Colorado Money Transmitter License Act On September 20, 2018, following months of consultation with the Colorado Attorney General’s office, Colorado’s Division of Banking released interim … Continue Reading
