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…
There is general consensus that 2017 was a banner year for cryptocurrencies. According to CNBC, initial coin offerings (ICOs) in 2017 raised approximately $3.7 billion for issuing companies. And despite some recent weakness in high-profile cryptocurrencies like bitcoin, we expect an increasing number of ICOs from an ever-expanding scope of…
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…
As published in Bloomberg BNA’s Securities Regulation & Law Report, December 18, 2017 An initial coin offering (“ICO”) does not happen on its own. Rather, there are companies and individuals that assist in successful token sales. These can include ICO consultants, marketing firms, board members, partners at private equity and…
Goodwin Partner Kelsey Lemaster spoke to CoinDesk earlier this week, discussing the potential implications of tax reform on cryptocurrency companies and investors. To read the full article, click here.
On August 30, 2017, the Israeli equivalent of the U.S. Securities and Exchange Commission, the Israeli Security Authority (“ISA”) announced it had formed a committee to study whether, and how, to apply Israeli securities laws to initial coin offerings (“ICOs”). Specifically, the ISA stated it would examine six issues related…
Pursuant to its LabCFTC initiative, the regulator issued a FinTech Primer on virtual currencies, including addressing the jurisdictional reach of the CFTC and the SEC (and potential overlap). Several questions remain regarding the already uncertain status of ICOs under the federal securities and commodities laws and regulations. WHAT HAPPENED? On…
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…
Various news sources, including Reuters, are reporting that the People’s Bank of China has issued a joint statement with other Chinese regulators proclaiming that ICOs in China are illegal. See the Reuters article here: China hits booming cryptocurrency market with coin fundraising ban. The statement further directs Individuals and organizations…
A recent Delaware bill is poised to allow private Delaware corporations “use networks of electronic databases (examples of which are described currently as “distributed ledgers” or a “blockchain”) for the creation and maintenance of corporate records, including the corporation’s stock ledger.” The bill is a significant step towards the mainstream…