Digital currency is an exciting, dynamic and growing technology changing the financial and legal landscapes. To keep pace, corporate counsel must stay abreast of new rules, new regulations, and new applications of blockchain technology. Recognizing this need, Digital Currency + Blockchain Perspectives chronicles industry news, including regulatory developments and other issues affecting our clients and the digital currency industry.

Replacing Traditional Capitalization Tables with Blockchain-Based Ledgers

Delaware amended the Delaware General Corporation Law (DGCL) and the Delaware Limited Liability Company Act (DLLCA) in 2017 and 2018, respectively, to permit corporations and limited liability companies to represent capital stock, record equity transactions, and communicate with equityholders via blockchain-based distributed ledgers. (S. 69, 149th Gen. Assembly, Del. 2017;…

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Rensel v. Centra Tech, Inc., No. 17-cv-24500, 2019 WL 6828270 (S.D. Fla. Dec. 13, 2019)

On December 13, 2019, the U.S. District Court for the Southern District of Florida granted the plaintiffs’ motion for default judgment in a putative securities class action against Centra Tech, Inc. (“Centra Tech”). The putative class action complaint alleged that the defendants violated Sections 12(a) and 15 of the Securities…

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Securities and Exchange Commission v. Eyal and UnitedData, Inc. d/b/a “SHOPIN,” No. 1:19-cv-11325

On December 11, 2019, the SEC filed an enforcement action in the United States District Court for the Southern District of New York against UnitedData, Inc. d/b/a Shopin (“Shopin”) and its CEO (Eran Eyal) for violations of Sections 5(a) and 5(c) of the Securities Act for the sale of unregistered…

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Node Agreements for Blockchain-Based Tokens

The method by which cryptocurrency and digital asset companies issue their blockchain-based tokens into the market has evolved, pushed along by regulatory developments and technological advancements.  We have observed the popularity ebb-and-flow of direct token sales, Simple Agreements for Tokens (‘SAFTs’), genesis tokens convertible into principal tokens, and gifted distributions. …

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Paxos Trust Company, LLC, SEC No-Action Letter

On October 28, 2019, the SEC issued a no-action letter to Paxos Trust Company in connection with its proposal to settle equity securities trades on a blockchain platform for broker-dealers. The proposed “Paxos Settlement Service” is a private and permissioned distributed ledger system that records changes in the ownership of…

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