On December 11, 2019, the SEC filed an enforcement action in the United States District Court for the Southern District of New York against United Data, 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…
On November 1, 2019, the SEC issued a final judgment as to Veritaseum, Inc., Veritaseum, LLC, and their founder (Reginald Middleton) concerning the defendants’ conduct with respect to an ICO and the manipulation of cryptocurrency. The order was part of a settlement between the defendants and the SEC. Reginald Middleton…
On November 21, 2019, Mark S. Scott, a former partner at law firm Locke Lord LLP, was convicted of one count of conspiracy to commit money laundering and one count of conspiracy to commit bank fraud in connection with his work for OneCoin Ltd. Mr. Scott was found guilty following…
On October 9th, the IRS released a revenue procedure ruling and related FAQ, clarifying tax treatment related to cryptocurrency in certain instances. The ruling focused on tax treatment of hard forks and airdrops, and provided that in the event of a “hard fork”—where a cryptocurrency’s blockchain protocol is changed, or…
On October 31, 2019, the SEC issued an order instituting cease-and-desist proceedings pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934, making findings, and imposing a cease-and-desist order with respect to XBT Corp. SARL (“XBT”) in connection with its…
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. …
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…
On October 6, 2019, alleged cryptocurrency investors filed a putative class action complaint in the U. S. District Court for the Southern District of New York, alleging that Bitfinex, Tether, and other defendants coordinated to manipulate the price of Bitcoin and disrupted the cryptocurrency market. The complaint brought claims for…
On October 11, 2019, the SEC filed an emergency action in the U.S. District Court for the Southern District of New York against Telegram Group Inc. and a wholly-owned subsidiary for violation of Sections 5(a) and 5(c) of the Securities Act for the sale of unregistered securities. The SEC sought…
On September 30, 2019, the 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 with respect to Block.one in connection with an ICO allegedly conducted in violation of Sections 5(a) and 5(c) of the Securities…