Some recent moves by the Securities and Exchange Commission (SEC) provide digital currency startups with an easier path to procuring up to $50 million in capital. A brief history of crowdfunding legislation is in order. Prior to 2012, the securities market was primarily open only to accredited investors – defined…
Bitcoin was the first cryptocurrency, but it is not the only one out there. So what distinguishes alternative currencies from Bitcoin? And what purpose do these newer “altcoins” serve? Like Bitcoin, altcoins are based on mathematics. Unlike traditional currencies based on gold standards or fiat currencies that maintain their value…
All signs seem to point that digital currency is changing the way we bank. One example: according to the Millennial Disruption Index, 68% of millennials say that in 5 years, the way we access our money will be totally different, 70% say the way we pay for things will be…
Bitcoin is built on a distributed consensus technology – the blockchain – which allows transactions to be verified and securely stored without a centralized authority authenticating the transactions. In its current form, the blockchain serves as a ledger for digital currency. However, developers with a sophisticated understanding of cryptography seek…
Given digital currency’s rocky relationship with the Chinese government over the past year or so, some observers have suggested that digital currency service providers, investors and consumers might shift their focus to Hong Kong. The recent bitcoin-related scandal involving MyCoin has challenged this premise, however, and has prompted many –…
Report Analyzes New “Pieces to the Puzzle” of Causes Behind Mt. Gox Collapse On February 14, 2015, WizSec, a Bitcoin security firm based in Tokyo, published a report that claims to shed new light on the causes for the infamous 2014 collapse of the bitcoin exchange Mt. Gox. It has…
In our prior post New York’s BitLicense: Important Revisions Part 1, we presented some important revisions to the prior proposed BitLicense. This post continues that discussion. Two-Year Transitional License In a nod to the difficulties of starting up a company, the new BitLicense permits the Superintendent to grant, at his…
The curtain has been drawn back, and the much-anticipated BitLicense revisions stand ready for comment. As 2014 drew to a close, Benjamin Lawsky, Superintendent of New York’s Department of Financial Services (DFS) gave a small peek behind the curtain of pending revisions. Now, in 2015, the updated BitLicense comes revised…
On December 12, 2014, in Treasury Decision 9706 (the “Treasury Decision”), the IRS and the Treasury Department finalized the regulations under Section 6038D of the Internal Revenue Code (“Code”). With respect to digital currencies, the Treasury Decision notes that the IRS is considering the proper treatment of digital currencies under…
While some regulators are struggling to fit bitcoin’s innovative peg into preexisting holes—is bitcoin a currency or a commodity or something else entirely?—the novelty of digital currencies falls squarely within the regulatory purview of some agencies. One example is the Office of Foreign Assets Control, or OFAC, the unit within…