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Since the beginning of blockchain and cryptocurrency, it was apparent that there would be emerging legal issues unique to them, while other legal issues would be applied in the same way as they have always been applied, but simply to a new technology. The case discussed in this post looks at the issue of personal jurisdiction through that prism. HEX is a cryptocurrency marketed as the first blockchain certificate of deposit. Defendant CoinMarketCap is a…

Just last week we wrote about the oft-visited subject of the refusal of the U.S. Securities and Exchange Commission (SEC) to approve a spot Bitcoin ETF, even though it has approved futures Bitcoin ETFs. And we noted that Grayscale Investments LLC (Grayscale) has appealed to the D.C. Circuit the SEC’s decision in its case, stressing the arbitrary nature of the SEC’s position concerning spot ETFs; oral argument is scheduled for March 7. On January 30,…

Nexo Financial LLC is a company that describes itself as a leading cryptocurrency institution offering a number of digital assets services through its website. It offered its customers, among other things, an Earn Interest Product (EIP), which allowed customers to lend certain digital assets in interest-bearing accounts. In a proceeding before the U.S. Consumer Financial Protection Bureau, Nexo argued in response to a civil investigative demand that the Bureau lacked jurisdiction because the Securities and Exchange…

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. In April 2022, however, the SEC approved the Teucrium ETF — resting its decision on the fact that it was a futures ETF. But, unlike the earlier approved funds that had been filed under the 40 Act, Teucrium had filed under the Securities…

In previous posts, we addressed the interesting service of process issues that were the subject of a number of decisions in the lawsuit that the United States Commodity Futures Trading Commission (CFTC) brought against Ooki DAO (a DAO is a decentralized autonomous organization). But the case has also received a lot of attention for the larger issues of a proceeding against a decentralized organization and who might be liable for its acts. The court’s recent…

In an earlier post, we reported that Judge William Orrick of the Northern District of California had authorized service of process on Ooki DAO (a DAO is a decentralized autonomous organization) through a Help Chat Box on Ooki DAO’s website, with contemporaneous notice through an Online Forum linked through its website. In another post, we reported that the Judge Orrick subsequently required the CFTC also to serve process on two Token Holders once it was…

In an earlier post, we reported that a judge had authorized service of process on a DAO (decentralized autonomous organization) through a Help Chat Box on the DAO’s website, with contemporaneous notice through an Online Forum linked through its website. Four amici — venture capital firms Paradigm and Andreessen Horowitz, crypto legal consortium LeXpunK, and the DeFi Education Fund — sought reconsideration of that decision. On December 12, 2023, Judge William Orrick issued an order…

Kim Kardashian, Floyd Mayweather, Jr. and Paul Pierce are among the defendants being sued for their role in promoting EthereumMax (“EMAX”), a cryptocurrency project centered around the EthereumMax tokens, a blockchain-based digital asset. The Defendants moved to dismiss the lawsuit. In the decision granting the motion, the Court first noted that Private Securities Litigation Reform Act (“PSLRA”) likely barred the claim based on its excluding RICO claims.  To his surprise, however, Defendants did not seek…

On November 18, 2022, the U.S. Securities and Exchange Commission issued an order instituting administrative proceedings against American CryptoFed DAO LLC (“American CryptoFed”), an issuer of digital assets, to determine whether a stop order should be issued denying or suspending the effective date of the registration of the Ducat and Locke tokens (the “Tokens”) under the Securities Act of 1933 (the “Securities Act”). The SEC’s Enforcement Division (“Enforcement”) alleges that American CryptoFed’s Form S-1 registration statement…

Nexo Financial LLC is a company that describes itself as a leading cryptocurrency institution offering a number of digital assets services through its website. It offered its customers, among other things, an Earn Interest Product, which allowed customers to lend certain digital assets in interest-bearing accounts. On December 1, 2021, the Consumer Financial Protection Bureau (“Bureau”) served Nexo with a civil investigative demand (“CID”) requiring that a representative of the company appear by videoconference for…