Crypto Exchange Startup Seeks SEC Approval for Initial Public Offering of Security Tokens

Crypto exchange startup INX Limited filed a preliminary prospectus outlining its plans to raise between $5 million and $129.5 million in an initial public offering (IPO), making it one of few cryptocurrency companies to seek a U.S. listing for its tokens through registration of a public offering.  INX filed a prospectus with the U.S. Securities and Exchange Commission (SEC) in August in anticipation of an offering of approximately 130 million

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IPO, Securities, US

Swiss Financial Market Supervisory Authority FINMA issues guidance on stable coins and comments on planned Libra cryptocurrency

On September 11, 2019, the Swiss Financial Market Supervisory Authority (FINMA) has issued guidance on the regulatory treatment of stable coins. As a supplement to the previously issued ICO Guidelines, FINMA outlines how it treats stable coins under the Swiss regulatory framework. In this connection, FINMA also gives initial indications on the request for a regulatory assessment filed by the Geneva-based Libra Association, a high-profile cryptocurrency project orchestrated by Facebook

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Libra, Regulation, Stable Coins, Switzerland

Burundi Bans Cryptocurrency

The Bank of The Republic of Burundi issued a statement in which it banned the use of cryptocurrencies in the country. The Statement said, “Since virtual currencies or cryptocurrencies are not regulated and are not issued or guaranteed by any Government or Central Bank, these currencies do not have legal tender in the territory of Burundi.” The measure was justified as a consumer protection measure: “virtual currencies are traded on

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Burundi, Cryptocurrency

Marshall Islands To Issue Its Own Cryptocurrency

In 2018, the Marshall Islands passed a Sovereign Currency Act, declaring its intention to release a new, national digital currency.  In an essay published by Coindesk on September 4, The Honorable David Paul, Minister In-Assistance to the President and Environment of the Marshall Islands, stated that the official launch of the cryptocurrency – to be known as the sovereign (SOV) coin — will be announce at Invest:Asia 2019, upcoming in

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Cryptocurrency, Marshall Islands

IRS Begins Notifying Owners of Cryptocurrency of Potential Failures to Report Income and Pay Taxes

In July, the IRS announced that it had begun sending letters to taxpayers who may have failed to properly report income and pay any tax associated with cryptocurrency transactions or who did not properly report such transactions. The IRS expects to send more than 10,000 letters before the end of August. Taxpayers who have not properly reported their cryptocurrency transactions are, where appropriate, liable for tax, penalties, and interest, and

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Cryptocurrency, IRS, US

SEC Fines SimplyVital for Unregistered ICO

On August 12, 2019, the U.S. Securities and Exchange Commission announced settled charges against a New England-based blockchain company for offering and selling approximately $6.3 million of securities to the public in unregistered transactions. According to the SEC’s order, in late 2017, SimplyVital Health, Inc. publicly announced its plan to conduct an ICO to raise money to further its development of Health Nexus, a “healthcare-related blockchain ecosystem.” SimplyVital offered a

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ICO, SEC, Simple Agreements for Future Tokens (SAFTs), US

SEC Obtains TRO Against Organizer of “Fraudulent” ICO

On August 13, 2019, the U.S. Securities and Exchange Commission announced on fraud charges against a Brooklyn individual and two entities under his control who allegedly engaged in a fraudulent scheme to sell digital securities to investors and to manipulate the market for those securities. The SEC filed charges against Reginald “Reggie” Middleton, a self-described “financial guru,” and two entities he controls, Veritaseum, Inc. and Veritaseum, LLC (collectively, Veritaseum).  The

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ICO, SEC, Temporary Restraining Order (TRO), US

Texas Renews its Cryptocurrency Crackdown

Texas has been one of the more active states in the United States when it comes to cryptocurrency enforcement.  The Texas State Securities Board was the first state securities regulator to enter an enforcement order against a cryptocurrency firm and, to date, the Securities Commissioner has entered 24 administrative orders involving 62 individuals and entities. In June, the State Securities Board started an investigative sweep of suspect cryptocurrency offerings after the price of bitcoin nearly

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Cryptocurrency, Texas

IOSCO Publishes Consultation on how Crypto Trading Platforms are Regulated

IOSCO (the International Organization of Securities Commissions)  has recently published a consultation focusing on how platforms which trade crypto-assets are regulated. The global standards setting body considers that promoting innovation must be balanced with appropriate regulatory oversight. For these purposes, IOSCO defines crypto-assets broadly as “a type of private asset that depends primarily on cryptography and DLT or similar technology as part of its perceived or inherent value, and can

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Cryptoassets, IOSCO

SEC and FINRA Issue Joint Statement on Broker-Dealer Custody of Digital Asset Securities

On July 8, 2019, the staffs of the U.S. Securities and Exchange Commission’s Division of Trading and Markets and the Financial Industry Regulatory Authority (“FINRA”)  issued a joint statement articulating various considerations relevant to questions they had received concerning the application of the federal securities laws and the rules of FINRA to the potential intermediation—including custody—of digital asset securities and transactions. At the outset, the Statement made clear that novel

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Cryptoassets, FINRA, SEC, SIPA, US
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