On March 31, 2019, the U. S. District Court for the Southern District of New York denied a motion to dismiss a putative class action complaint alleging that ATBCOIN LLC (“ATBCOIN”) and its co-founders and officers (Edward Ng and Herbert W. Hoover) violated Sections 12(a) and 15 of the Securities…
On February 14, 2019, the Southern District of California entered a preliminary injunction prohibiting Blockvest, LLC (“Blockvest”), a company set up to exchange cryptocurrencies, and its founder, Reginald Buddy Ringgold, III (“Ringgold”), from violating an anti-fraud provision of the federal securities laws. The decision came following the court’s initial denial…
On February 20, 2019, the Enforcement Division of the U.S. Securities and Exchange Commission (“SEC”) issued an Order Instituting Cease-And-Desist Proceedings Pursuant To Section 8a Of The Securities Act Of 1933, Making Findings, And Imposing A Cease-And-Desist Order (“Order”) [1] against Gladius Network LLC (“Gladius”) for an initial coin offering…
On February 8, 2019, the U.S. District Court for the Southern District of Florida granted in part and denied in part the plaintiffs’ motion for summary judgment dismissing a putative class action complaint alleging (among other things) that Monkey Capital, LLC and Monkey Capital Inc. (collectively “Monkey Capital”) violated Sections…
Basis, one of the most well-funded crypto-startups, had plans to create an algorithmic central bank that aimed to create a price-stable cryptocurrency within a decentralized monetary system. In its April 2018 fundraising efforts, Basis had secured $133 million in funding from large institutional investors. However, citing regulatory constraints, Basis announced…
On November 16, 2018, the Divisions of Corporation Finance, Investment Management, and Trading and Markets of the U.S. Securities and Exchange Commission (“SEC”) issued a Statement on Digital Asset Securities Issuance and Trading, summarizing recent SEC enforcement actions “involving the intersection of long-standing applications of our federal securities laws and…
On November 8, 2018, the U.S. Securities and Exchange Commission (“SEC”) announced that it settled charges against Zachary Coburn, the founder of blockchain token trading platform EtherDelta, over operating an unregistered securities exchange.[1] The SEC’s cease-and-desist order to Coburn describes EtherDelta’s website as a user-friendly interface resembling online securities trading…
Earlier today, Deputy Attorney General Rod J. Rosenstein announced that the President issued an executive order establishing a new Task Force on Market Integrity and Consumer Fraud, comprised of a number of divisions of the Department of Justice (DOJ), including the FBI and various United States Attorney’s Offices as designated…
The Securities and Exchange Commission (SEC) finally provided some good news, and guidance, regarding permissible token sales. On June 14, 2018, William Hinman, Director of the SEC Division of Corporation Finance, speaking at the Yahoo Finance All Markets Summit: Crypto, shared remarks that filled in some gaps surrounding the security…
This past week was a busy one for state securities regulators, the CFTC and the SEC as they continue their focus on rooting out fraud from the digital currency space and crypto- and blockchain-based ventures. Noteworthy developments included (1) the North American Securities Administrators Association (NASAA) announcing a “cryptosweep” –…