ICO Regulation in Germany

Initial Coin Offerings are now mushrooming in Germany as well.  Besides the recent Savedroid ICO, the local Frankfurt news section of the Frankfurter Allgemeine Zeitung recently  mentioned at least three more transactions that are in the process of being launched. Like its many European counterparts, the German regulator BaFin is very skeptical regarding blockchain-based coin (“token”) sales and has issued a number of warnings to consumers. More recently, on 20

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Germany, ICO

SEC Says Cryptocurrency Platforms Must be Registered

There have been previous posts in this blog about statements by the U.S. SEC saying that most ICO’s would seem to qualify as securities offering and thus must be registered (or qualify for an exemption).  In a Statement issued yesterday, the SEC took another tact with implications for the cryptocurrency industry, this time going after exchanges.  The SEC said, “If a platform offers trading of digital assets that are securities

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Cryptocurrency, Exchanges, SEC, US

Court Affirms CFTC Jurisdiction Over Cryptocurrency

As early as September 2015, the CFTC took the position that virtual currencies such as Bitcoin are commodities. See In re Coinflip, Inc., No. 15-29 (C.F.T.C. Sep. 17, 2015). Based on that jurisdiction, in January, the CFTC brought a suit against Patrick K. McDonnell, of Staten Island, New York, and CabbageTech, Corp. d/b/a Coin Drop Markets (CDM). McDonnell brought a motion challenging the jurisdiction of the CFTC.  In a decision yesterday,

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CFTC, Cryptocurrency, Litigation, US

Coinbase Hit With Two Class Action Lawsuits

When traders want to purchase crypto using traditional currency, or exchange one cryptocurrency for another, they do so via an exchange.  Coinbase is one of the world’s largest, with over 13 million users.  Over the past few days it has been hit with two class action lawsuits, both in federal district court in California. The first an insider trading case.   The suit claims Coinbase employees unfairly profited from the December

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Cryptocurrency, ICO, Litigation, US

Two Global Companies Talk Blockchain

In terms of real-world applications, much of the blockchain activity is in fintech and among startups.  But earlier this week, two global companies discussed how they plan to use blockchain.  As Techcrunch reported, Rakuten is planning a new cryptocurrency called Rakuten Coin — built on blockchain technology and the company’s existing loyalty program, Rakuten Super Points — which it plans to use to encourage loyalty services globally and to help

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SEC Investigates Cryptocurrency Companies

The U.S. SEC, in recent months, repeatedly put cryptocurrency companies and their advisers on notice about what officials said were violations of securities rules designed to protect investors.  see posts of 1-3; 1-23; 2-6.  And  SEC chairman Clayton said he had instructed his staff to be on high alert for approaches to ICOs that may be contrary to the spirit of those laws.  According to a Wall Street Journal report,

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Cryptocurrency, ICO, SEC, US

Malaysian Central Bank Requires ID for Cryptocurrency Transactions

A press release from Bank Negara Malaysia (BNM), Malaysisa’s central bank, stated that the  “Anti-Money Laundering and Counter Financing of Terrorism Policy for Digital Currencies”  went into effect as of February 27, 2018.   It had been introduced as a draft in December 2017. Reporting institutions are required to conduct customer due diligence on all customers and the persons conducting the transaction when the reporting institution establishes business relationship with a

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Cryptocurrency, Malaysia

Defendant Argues Cryptocurrency is Not Security

We have reported in this space about how the SEC has indicated that most ICOs probably qualify as securities under U.S. law. see 1-3 and 1-23.  One of the SEC’s first enforcement actions in this regard was against  Maksim Zaslavskiy for his two initial coin offerings allegedly marketed through his companies REcoin and Diamond Reserve Club.   That was followed by a criminal suit. Yesterday, Zaslavskiy sought to dismiss the criminal

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Cryptocurrency, ICO, Litigation, SEC, Securities, US

Public Consultation Open for Draft Cryptocurrency Anti-money Laundering Rules in Australia

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has recently published draft anti-money laundering and counter-terrorism financing rules (AML/CTF Rules) which are relevant to digital currency exchange service providers following the passage of the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2017 (Act) in December 2017. The new laws are scheduled to come into effect on 13 June 2018.  Tthe Act introduces new laws to regulate digital currency exchange service

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AML, Australia, Cryptocurrency

Venezuela Launches the Petro

With most governments regularly issuing warnings against cryptocurrencies, Venezuela, on Tuesday, became the fist government to issue its own cryptocurrency, with the pre-launch of the Petro.  President Maduro announced on Twitter first-day presales of $735 million, though news outlets reported that the figure could not be substantiated.  The Venezuelan government says that each unit of the petro is pegged to the price of one barrel of Venezuelan oil. Many questions

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Cryptocurrency, Venezuela