On August 1, 2022 the US Securities and Exchange Commission brought a lawsuit alleging that Forsage was a fraudulent crypto scheme. According to the Complaint, Defendants Vladimir “Lado” Okhotnikov, Jane Doe a/k/a Lola Ferrari, Mikail “Mike” Sergeev, and Sergey Maslakov (the founders of Forsage) created, operated and maintained an online pyramid and Ponzi scheme through Forsage.io (“Forsage”), a website that allowed millions of retail investors in the United States and elsewhere to enter into transactions…
We wrote last week about the SEC’s recent insider trading lawsuit in which it identified nine tokens as “securities.” We made the following observation: “The potential implications of the SEC’s identifying these nine assets as securities are obvious. Securities exchanges must be registered with the SEC. There are undoubtedly numerous cryptocurrency platforms that sell the nine tokens and which are not so registered. Will the SEC next train its sights on those platforms?” It looks…
The SEC has brought numerous cases in which it alleged that specific tokens were “securities” and that their offerings violated the securities laws. Those cases were typically brought against the issuers. However, the SEC upped the ante in a lawsuit it brought on July 21, 2022 in which the SEC declared that nine cryptocurrencies were “securities,” but in a case not brought against the issuers. The lawsuit is the SEC’s first insider trading case dealing…
We have followed for years the saga of the many applications for a spot Bitcoin ETF that have been denied by the U.S. Securities and Exchange Commission (SEC). See here and here. This included the hope, when current SEC Chairman Gary Gensler was originally appointed, that the SEC might view things differently, but it was not meant to be, as the string of denials continued. There was one bright spot, in October 2021, when the…
On June 7, 2022, Senators Cynthia M. Lummis (R-WY) and Kristen Gillibrand (D-NY) introduced a bill to regulate digital assets and promote financial innovation. The proposed legislation is the first significant, bipartisan effort to apply comprehensive regulation to digital assets. The proposed legislation begins with the premise that digital assets are commodities and their regulation appropriately rests with the Commodity Futures Trading Commission (CFTC). Under the regime as contemplated, the Securities and Exchange Commission (SEC) would be…
We have written often about the efforts of the United States Securities and Exchange Commission (here and here) and Commodity Futures Trading Commission (here and here) to regulate in the cryptocurrency space. On May 19, 2022, the U.S. Department of Commerce entered the fray by publishing in the Federal Register a Request for Comments (RFC) under the title “Developing a Framework on Competitiveness of Digital Asset Technologies.” The impetus for the publication was President Biden’s…
On January 5, 2022, the United States Securities and Exchange Commission announced its first enforcement action of the year concerning a fraudulent initial coin offering. This is the latest in a long list of enforcement actions by the SEC targeting unregistered digital asset offerings. The SEC charged Australian citizen Craig Sproule and two companies he founded, Crowd Machine, Inc. and Metavine, Inc., with making materially false and misleading statements in connection with an unregistered offer…
As we have discussed previously, although there was hope when Gary Gensler was initially appointed Chairman of the Securities Exchange Commission that this would mean the SEC would take a different, more enlightened view on the issue of approving a spot Bitcoin ETFs, over the past couple of months, that hope was dashed when Chairman Gensler noted that he looked favorably only on futures-based Bitcoin ETFs. Consistent therewith, on October 19, 2021, Pro Shares became…
We have written extensively about the efforts that go back to when, in 2013, Gemini founders Tyler and Cameron Winklevoss first sought to launch a Bitcoin ETF. The SEC has rejected numerous such applications since then, and many are pending now. Over the past month or so, however, Securities and Exchange Commissioner Chairman Gary Gensler had indicated that he was more favorably inclined to allow futures-based cryptocurrency ETFs (as opposed to those that invest directly…
We recently reported about how U.S. Securities and Exchange Commission chairman Gary Gensler has made numerous comments concerning increased regulation over various aspects of the cryptocurrency industry. That same theme was part of his prepared remarks to Congress on September 14, 2021. The Chairman remarked that there was not enough investor protection in crypto finance, issuance, trading, or lending. He said: “[A]t this time, it’s more like the Wild West or the old world of…