Cryptocurrency Regulation in the Crosshairs: SEC Staff Weighs In, But Is There More Than Meets the Eye?

June 22

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 than resolving whether digital coins qualify as securities, Director Hinman’s remarks may have confirmed that cryptocurrencies remain in regulatory limbo.

Matt Kluchenek serves as the Head of the Firm’s Global Derivatives practice.  He is also the Co-Chair of the North American FinTech group and a member of the Global FinTech Steering Committee.  Matt regularly advises clients on a broad array of regulatory, transactional and enforcement matters involving the financial markets and cryptocurrencies, drawing on deep business knowledge to deliver practical advice.  Matt serves as a subject matter expert in printed media and industry events, has published numerous articles and has spoken at many industry events. He is also an adjunct professor at Northwestern University Pritzker School of Law, where he teaches a course on Derivatives Law.  Prior to joining Baker McKenzie, Mr. Kluchenek served as the general counsel of a large proprietary trading firm and as an associate general counsel of a major futures exchange.
Sam Kramer focuses his practice on multi-jurisdictional outsourcing, complex technology licensing, commercial contracting, and supply chain agreements and integration. He is frequently involved in outsourcing transactions and large scale IT services projects. Mr. Kramer also focuses on emerging technology services, including mobile virtual network operator (MVNO) transactions. He is the North American coordinator of the Firm’s MVNO practice.
Patrick Dennien is an associate in the Firm’s Washington, DC office. He practices in white collar crime and corporate investigations, sanction systems of international organizations, money laundering risk and AML regulation, cryptocurrency risk and regulation, and corporate compliance programs. Prior to joining the Firm, Patrick worked for the World Bank’s anti-corruption arm, where he assessed the compliance programs of multinational companies, and advised on the development and implementation of effective compliance programs.