Cryptocurrency Derivatives, Funds and Advisers: Key Considerations Under U.S. Commodity Laws (Part 1 – Cryptos Are Commodities (Except When They Are Not))

This post originally appeared in The Derivatives and Repo Report, and can be accessed here.:

In this multi-part posting, we outline key considerations for investment funds and their advisers regarding the application of the U.S commodity laws to cryptocurrency derivatives.   Part 1 focuses on the status of cryptocurrencies as commodities and how that status relates to the jurisdiction of the U.S. Commodity Futures Trading Commission. 

The full post is available at our sister publication, The Derivatives and Repo Report, and can be accessed here.

U.S. v. Zaslavskiy: Federal District Court Upholds Indictment for ICOs and Defers Final Howey Determination for Trial

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

Key Takeaways From the Tezos Litigation

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 securities laws to blockchain token sellers outside the United States. Continue Reading

SEC Staff Rejects Bitcoin Futures Based ETFs – Commission Stays Rejections Pending Its Review

For those of you who have been following along thus far, the U.S. Securities and Exchange Commission (“SEC”) and the SEC’s Division of Trading and Markets (“SEC Staff”) have been wrestling since December 2017 with whether to approve or disapprove exchange-traded funds (“ETFs”) that invest in bitcoin futures contracts.  On August 22, 2018, the SEC Staff decided to reject three proposals that included a total of nine bitcoin futures ETFs, possibly.  Just one day later, the SEC issued stays of all three rejections and elected to review the SEC Staff’s decisions.  With no clear decision, it is worth looking at the reasons for the SEC Staff’s rejection of the three proposals, particularly in light of the SEC’s recent split decision on the rejection of a bitcoin ETF (the “Bitcoin ETF”). Continue Reading

Why Is Blockchain Custody So Hard–Part 3

Why Blockchain Custody Is So Difficult—Paths Forward?” was recently posted on Perkins Coie’s Asset Management ADVocate blog. The blog post completes the analysis of the difficult question of how to comply with regulations requiring independent custody of cryptocurrency. This series focuses on the custody requirements for registered investment companies in an attempt to respond to important questions raised by the SEC’s Director of Investment Management. This installment discusses three possible approaches to trading cryptocurrency while complying with these custody requirements.

Why Blockchain Custody Is So Difficult—A Hard Part

Why Blockchain Custody Is So Difficult—A Hard Part” was recently posted on Perkins Coie’s Asset Management ADVocate blog. The blog post continues the analysis of the difficult question of how to comply with regulations requiring independent custody of cryptocurrency. This series focuses on the custody requirements for registered investment companies in an attempt to respond to important questions raised by the SEC’s Director of Investment Management. This installment discusses challenges custodians will face when trying to allow customers to trade cryptocurrency while maintaining custody.

Why Blockchain Custody Is So Difficult—The Simple Part

Why Blockchain Custody Is So Difficult—The Simple Part” was recently posted on Perkins Coie’s Asset Management ADVocate blog. The post begins with an analysis of the difficult question of how to comply with regulations requiring independent custody of cryptocurrency. This series will focus on the custody requirements for registered investment companies in an attempt to respond to important questions raised by the SEC’s Director of Investment Management. We propose a simple legal answer, while exploring the difficulties custodians will face when implementing this approach.

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