This writer received three cold emails in two weeks asking for legal help around operating a Bitcoin ATM (BTM).[1] Each groundbreaker asked: “What are the legal requirements for an operator putting a BTM in, say, a coffee shop?” Lawyers and businessmen and women work on the assumption that for every one person who…
On February 7, 2018, the New York State Department of Financial Services (NY DFS) issued guidance to all virtual currency businesses that maintain a “BitLicense” or that are chartered as a limited purpose trust company under New York Banking Law (collectively, VC Entities), including those that maintain a money transmitter…
On February 7, 2018, the SEC’s Office of Compliance Inspections and Examinations (OCIE) announced its 2018 Examination Priorities. In what comes as no surprise, the exam priorities include initial coin offerings (ICOs) and cryptocurrency, stating the following: “The cryptocurrency and ICO markets have grown rapidly and present a number of…
On January 19, 2018, SEC Co-Enforcement Directors Stephanie Avakian and Steven Peikin and CFTC Enforcement Director James McDonald issued the following joint statement regarding virtual currency enforcement actions: “When market participants engage in fraud under the guise of offering digital instruments – whether characterized as virtual currencies, coins, tokens, or…
On January 8, 2018, the Financial Industry Regulatory Authority (FINRA) released its 2018 Annual Regulatory and Examination Priorities Letter (Exam Priorities Letter) for its broker-dealer members. In the Exam Priorities Letter, FINRA addresses initial coin offerings (ICOs) and digital currencies, stating the following: “FINRA will closely monitor developments in this…
Major derivatives market operators CBOE Holdings and CME Group have jumped into the digital currency fray within the last two weeks by launching cash-settled bitcoin futures contracts (1). The exchanges recently cleared de facto regulatory hurdles when the Commodity Futures Trading Commission (CFTC) announced the completion of the exchanges’ “self-certification”…
Part of their “View From the Top” series, the MIT Club of Northern California will host a night of networking and an informative panel discussion titled “Blockchain, Bitcoin, Cryptocurrency and ICOs” on Wednesday, December 6, 2017 at the Intercontinental San Francisco. Panel discussion topics include: what is a cryptocurrency and…
Recently, the U.S. Commodity Futures Trading Commission (“CFTC”) granted LedgerX, LLC, registration as a derivatives clearing organization (“DCO”) under the Commodity Exchange Act, and with it, the right to clear fully collateralized digital currency swaps, subject to applicable law. It became the “first federally regulated Bitcoin options exchange and clearinghouse to list…
On July 26, 2017, the U.S. Department of Justice announced that a grand jury in the Northern District of California had indicted Alexander Vinnik, a Russian national, and BTC-e, the bitcoin exchange that Vinnik allegedly operated, and one of the world’s largest and most widely used digital currency exchanges. The…
On March 10, 2017, the Securities and Exchange Commission (“SEC”) rejected the highly anticipated Winklevoss twins’ COIN bitcoin exchange traded fund (“ETF”), causing the digital currency to plummet 18% in value, to $978.76, “the lowest intraday price in a month.” Then, on March 28, 2017, the SEC rejected a second…