U.S. SEC Brings Civil and Criminal Charges Against Founders of Centra Cryptocurrency Firm

The U.S. Securities and Exchange Commission announced today that it charged two co-founders of a purported financial services start-up with orchestrating a fraudulent initial coin offering (ICO) that raised more than $32 million from thousands of investors last year. Criminal authorities separately charged and arrested both defendants. The SEC’s complaint alleges that Sohrab “Sam” Sharma and Robert Farkas, co-founders of Centra Tech., Inc., masterminded a fraudulent ICO in which Centra

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Cryptocurrency, ICO, Litigation, SEC, Securities, US

Blockchain and Competition Law: Blockchain Must Not be a Solution Looking for a Problem

There is huge interest in the potential of blockchain to transform business processes and generate commercial efficiencies and cost savings across a whole host of business sectors. Mindful of the risks, and as long as antitrust law is considered from an early stage, it is perfectly possible to develop and implement a pro-competitive blockchain platform. Above all though, a blockchain platform must have a genuine, justifiable commercial purpose: an antitrust

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Massachusetts Regulator Halts Five ICOs

The office of Massachusetts Secretary of State announced today that it had halted ICOs from five companies, claiming that the sale of digital tokens amounts to the unregistered offering of securities.  Mattervest Inc, Pink Ribbon ICO, Across Platforms Inc, Sparkco Inc and 18 Moons were all ordered to  stop sales of their coins.  The firms, which were all either incorporated in Massachusetts or named the state as their principal place

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ICO, Litigation, Securities, US

Twitter Joins Google and Facebook in Banning Cryptocurrency Ads

Reuters reported that, starting tomorrow,  Twitter will ban cryptocurrency ads.  The prohibition will cover advertising of ICOS and ads by cryptocurrency exchanges and cryptocurrency wallet services, unless they are public companies listed on certain major stock markets.  Facebook banned ads promoting cryptocurrencies in January.  Earlier this month, Google announced that its ban of  cryptocurrency-related content, including ICOs, wallets, and trading advice, would go into effect in June.

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Cryptocurrency, ICO

Tennessee Recognizes Blockchain and Smart Contracts

Tennessee enacted a law yesterday that recognizes “the legal authority to use blockchain technology and smart contracts in conducting electronic transactions.” Under the new legislation, “A signature that is secured through blockchain technology is considered to be in an electronic form and to be an electronic signature.” With respect to smart contracts, the law defines it as “an event-driven program, that runs on a distributed, decentralized, shared, and replicated ledger

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Smart Contracts, US

U.S. Government May Include Digital Currency Addresses on List of Sanctioned Parties

OFAC, the Office of Foreign Assets Control, is the financial intelligence and enforcement agency of the U.S. Treasury Department that administers and enforces economic and trade sanctions.  On March 19, 2018, the OFAC updated its FAQs to include a section on virtual currency.  In the new section, OFAC provides guidance about the various money laundering and terrorist financing risks associated with virtual currency, and goes on to state that it

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Cryptocurrency, OFAC, US

Petro Cryptocurrency Outlawed in U.S.

President Donald Trump signed an executive order today that imposed sanction against Venezuela’s cryptocurrency, the “petro.”  Trump’s executive order prohibits U.S. persons and others subject to U.S. jurisdiction from engaging in transactions involving any digital currency, coin or token issued by, for or on behalf of the Venezuelan government.  The petro has been opposed by opposition legislators in Venezuela’s opposition-controlled legislature, who consider it a violation of the constitution.

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Cryptocurrency, Venezuela

U.S. FTC Shuts Down Promoters of Deceptive Cryptocurrency Schemes

At the request of the Federal Trade Commission, a federal court has halted the activities of four individuals who allegedly promoted deceptive money-making schemes involving cryptocurrencies. These schemes falsely promised that participants could earn large returns by paying cryptocurrency such as bitcoin or Litecoin to enroll in the schemes. The complaint was filed under seal on February 16 and announced today.  It alleges that three defendants – Thomas Dluca, Louis

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Cryptocurrency, Litigation, US

The Cautious Approach to Cryptocurrencies and ICOs in Malaysia

The global frenzy around cryptocurrencies has seen prices fluctuate dramatically over the past year, leading to a growing interest among Malaysian investors. The Central Bank of Malaysia (BNM) has repeatedly maintained its position that digital currencies are not legal tender in Malaysia, and has advised the public to be cautious of the risks that come with them. While there are no specific Malaysian regulations governing cryptocurrencies or their exchanges, the

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Cryptocurrency, ICO, Malaysia

Regulatory Aspects of ICOs in Switzerland

The Swiss Financial Market Supervisory Authority (FINMA) is one of the regulatory bodies that has taken specific steps with respect to ICOs.  In its recently published booklet, Regulatory Aspects of ICOs in Switzerland, Baker McKenzie’s Zurich office gives an overview of the regulation of ICOs in Switzerland.

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ICO, Switzerland