Last Friday, November 16, the U.S. Securities and Exchange Commission Division of Corporation Finance, Division of Investment Management, and Division of Trading and Markets issued a “Statement on Digital Asset Securities Issuance and Trading.” The purpose was to note that, while the SEC encourages technological innovation, market participants must still adhere to the Commission’s well-established and well-functioning federal securities law framework when dealing with technological innovations, regardless of whether the securities are issued in certificated…
On October 24, 2018, the Japanese Financial Services Agency (JFSA) accredited the Japan Virtual Currency Exchange Association (JVCEA, established in March 2018) as a self-regulatory organization under the Payment Services Act (PSA). On the same day, an initial set of self-regulations and related guidelines came to effect, as prepared by the JVCEA. Going forward, it is anticipated that the JVCEA will cooperate with continued inspection and monitoring by the JFSA and will act to enhance…
On Monday 3 October, the European Parliament adopted a non-legislative Resolution on distributed ledger technologies (DLT) / blockchain. In the Resolution, the Parliament makes clear that it is keen to make Europe a leading player in the blockchain field. It discusses a range of blockchain use cases including: improving data efficiency and the reporting of clinical trials in the health sector; improving supply chain processes, such as facilitating the forwarding and monitoring of origin of…
On September 19, 2018, the Ukranian Parliament published a draft law which aims to set out the legal basis for the taxation of transactions involving virtual assets. The draft law defines the concept of “virtual assets,” as well as concepts such as “cryptocurrency,” “distributed ledger,” “token,” and “mining.” The draft law (available here in Ukrainian) seeks to introduce a separate taxation regime for transactions involving virtual assets. Thus, if a transaction involves a conversion of…
In May of this year, the Australian Securities and Investments Commission (ASIC) indicated that ICO issuers and their associated advisers would come under regulator scrutiny where their conduct or statements were identified as misleading or deceptive. The Australian Competition and Consumer Commission (ACCC) authorized ASIC to take action against misleading and deceptive conduct in relation to ICOs, even where the ICO does not constitute a “financial product” under Chapter 7 of the Corporations Act 2001.…
Last week we reported that the US SEC stopped a fraudulent ICO that falsely claimed that it had SEC approval. Yesterday, the SEC suspended trading in the securities of a company amid questions surrounding its statements about partnering with a claimed SEC-qualified custodian for use with cryptocurrency transactions and a purportedly registered public offering of preferred stock. The SEC’s trading suspension order says that two August 2018 press releases issued by Nevada-based American Retail Group,…
The U.S. SEC announced yesterday that it had stopped what sounds like the most brazen fake ICO yet. According to the complaint, Blockvest LLC not only falsely claimed that it had obtained SEC approval, it also used the SEC seal without permission (a violation of federal law) and promoted the ICO with a fake agency called the “Blockchain Exchange Commission” (using a graphic similar to the SEC’s seal and the same address as SEC headquarters).…
During 2017, the issue that probably got the most attention for companies raising capital through initial coin offerings (ICOs) was whether tokens constitute securities. However, governmental agencies and regulators, particularly the Swiss Financial Market Supervisory Authority (“FINMA”), focused on other legal issues as well. It was reiterated that companies issuing cryptocurrencies or tokens have to consider not only securities registration but also anti-money laundering and licensing compliance. It has also become clear that blockchain-related businesses…
This blog has previously discussed how different countries have taken varying positions with respect to their friendliness toward cryptocurrencies and ICOs. Baker McKenzie’s office in Thailand has prepared a guide that contains an overview of the regulatory landscape on digital assets in Thailand.
Switzerland often ranks among the most friendly and accommodating countries for blockchain-based companies to conduct their initial coin or token offering (“ICO”). Indeed, recent estimates are that more than 530 blockchain companies established in the Swiss cantons of Zurich and Zug have raised more than US$540 million through ICOs. Despite these facts, these companies often face significant difficulties in opening a bank account in Switzerland to hold the fiat currency proceeds of their ICOs. Swiss…