Thailand has moved closer to being among one of the first jurisdictions in the Asia-Pacific region (and globally) to facilitate ICOs through targeted regulation. According to a member of the Securities and Exchange Commission of Thailand (“SEC”), as reported by the Bangkok Post, five ICO projects are to be cleared by the regulator and permitted to move forward with their ICO plans (out of 50 ICO projects that applied for regulatory approval). This comes after…
On June 25 U.S. federal Chief Magistrate Judge Andrea Simonton issued a Report and Recommendation concluding that Centra Tokens, issued by tech startup Centra Tech, were investment contracts and therefore securities. There are reports in the press that this is the first time a US court has found that the issuance and sale of tokens through an ICO must comply with federal securities laws. The case in question, Rensel v. Centra Tech, Inc., is a…
Lithuania becomes the latest jurisdiction to release guidance in relation to ICOs. On 8 June 2018, the Lithuanian Government released new Guidelines to deal with what it referred to as an “explosion of ICOs” in the country. Lithuania heralds itself as a leader in FinTech and has published the ICO Guidelines as a step towards more “certainty and transparency in the regulatory, taxation [and] accounting” requirements of ICOs, and also, importantly, to encourage the crypto…
In our article for Bloomberg Law, we discuss the legal questions arising out of the announcement by William Hinman (SEC Director of the Division of Corporate Finance) that ether and bitcoin—the popular cryptocurrencies—would not qualify as securities. Numerous news organizations, as well as FinTech and cryptocurrency blogs, jumped on the announcement, reporting it as a major clarification regarding the legal status of cryptocurrencies and initial coin offerings. Unfortunately, there is a real risk that, rather…
Last month we reported on an SEC decision to take additional time to consider whether to approve a request to list five Bitcoin-related exchange-traded funds (ETFs) on one of the New York Stock exchange markets. That pattern is now being repeated. On December 4, 2017, NYSE Arca, Inc. filed with the SEC a proposed rule change to list and trade the shares of the ProShares Bitcoin ETF and the ProShares Short Bitcoin ETF. On March…
Depending on which U.S. government agency one looks to, cryptocurrencies can be a security (per the SEC), a commodity (per the CFTC), property (per the IRS), or a form of money (per FinCEN). In a Legal Advisory issued on June 18, the U.S. Office of Government Ethics took the position that virtual currency qualifies as “property held … for investment or the production of income” under the Ethics in Government Act. As a result, Executive branch employees are…
In Ukraine, two draft laws which aim to set out the legal basis for blockchain/cryptocurrency businesses in Ukraine have been proposed. The first draft law first submitted in October 2017 is concerned with taxation and provides for decreased corporate income tax, which is to be applied to margin earned on cryptocurrency deals (rather than turnover) and provides rules for the application of VAT. The latest draft law (reported here) seeks to define distributed ledger and smart contract…
On June 11 Wells Fargo became the latest major U.S. bank—with JPMorgan Chase, Bank of America, and Citigroup—to put in place a prohibition against using its credit cards to purchase cryptocurrency. Despite Wells Fargo’s attempt at a low-key implementation, the ban was quickly picked up by a raft of news organizations. A spokesperson for Wells Fargo issued the following statement: “Customers can no longer use their Wells Fargo credit cards to purchase cryptocurrency. We’re doing…
On 11 June, the UK’s financial services regulator, the Financial Conduct Authority (FCA), published a “Dear CEO letter” providing guidance on how banks should handle the financial crime risks associated with cryptoassets. The FCA is concerned that cryptoassets are being used in criminal activities such as money laundering or terrorist financing. The regulator expects banks to take reasonable and proportionate measures to lessen the risk of facilitating such crimes. The FCA notes that where banks…
On June 6, U.S. SEC Chairman Jay Clayton was interviewed on CNBC about Bitcoin and cryptocurrencies. He said, in effect, that “cryptocurrencies, these are replacements for sovereign currencies, replace the dollar, the euro, the yen with bitcoin… that type of currency is not a security.” As a securities lawyer and SEC defense counsel, I thought this was an absolutely correct statement of law, and refreshing candor from the SEC Chairman. What has concerned me over…