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

U.S. SEC Charges Former Bitcoin-Denominated Exchange and Operator With Fraud

The U.S. Securities and Exchange Commission today charged a former bitcoin-denominated platform and its operator with operating an unregistered securities exchange and defrauding users of that exchange.  The SEC also charged the operator with making false and misleading statements in connection with an unregistered offering of securities. The SEC alleges that BitFunder and its founder Jon E. Montroll operated BitFunder as an unregistered online securities exchange and defrauded exchange users

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ICO, Litigation, SEC, US

Swiss Regulator Issues Clear Guidelines for ICOs

In an effort to create clarity for market participants, the Swiss Financial Market Supervisory Authority FINMA published guidelines, on Friday, February 16, that set out how it intends to apply financial market legislation in handling inquiries from ICO organizers. The guidelines also define the information FINMA will require to deal with such inquiries and the principles upon which it will base its responses.  Focusing on anti-money laundering and securities regulation,

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AML, ICO, Switzerland

U.S. SEC Halts Trading In 3 Penny Stocks Tied To Cryptocurrency

Section 12(k) of the Securities Exchange Act of 1934 provides that, “if in [the SEC’s] opinion the public interest and the protection of investors so require, the Commission is authorized by order to (A) summarily to suspend trading in any security (other than an exempted security) for a period not exceeding 10 business days.” In Orders date February 15, the SEC relied on this rule to suspended trading in three

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Cryptocurrency, Litigation, SEC, US

US Treasury Official Pushes for Worldwide Cryptocurrency Regulation

In a speech yesterday, Sigal Mandelker, the under secretary for terrorism and financial intelligence for the US Department of the Treasury, pushed for stronger regulation of cryptocurrency.  She stated that Treasury regulates virtual currency exchangers as money transmitters and requires them to abide by Bank Secrecy Act obligations.  Of specific concern is that these exchanges be mindful of the anti-money laundering (AML) and combating the financing of terrorism (CFT) obligations. 

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AML, CFTC, Cryptocurrency

ESMA, EBA and EIOPA Warn Consumers on the Risks of Virtual Currencies

Consistent with the above post, the European Securities and Markets Authority (ESMA), the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) issued a Warning that warned consumers of the high risks of buying and/or holding cryptocurrencies.  The concern was that an increasing number of consumers buy cryptocurrencies with the expectation that the value will continue to grow, but without being aware of the high risk

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IMF Chief Says that Cryptocurrency Regulation is “Inevitable”

We have reported often on statements by various governments concerning cryptocurrency regulation.  Most recently  In an interview with CNN over the weekend, IMF Chief (and former Chairman of our law firm) Christine Lagarde said that such regulation is “inevitable.”  She noted that that there is probably quite a bit of dark activity [in cryptocurrencies] and that the IMF remains focused on anti-money laundering and countering the financing of terrorism, both

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AML, Cryptocurrency

Hong Kong Regulator Warns of Cryptocurrency Risks

The Hong Kong Securities and Futures Commission (SFC) issued a statement today repeating an earlier alert to investors to the potential risks of dealing with cryptocurrency exchanges and investing in initial coin offerings. The SFC’s statement echoed similar concerns recently voiced by the U.S. SEC.  That is, the SFC sent letters to seven cryptocurrency exchanges in Hong Kong or with connections to Hong Kong  warning them that they should not

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Cryptocurrency, Hong Kong

TRO Denied in Second BitConnect Lawsuit

We previously reported on the Kentucky court that issued a temporary restraining order against BitConnect.  On Wednesday, that TRO was extended to February 27. Yesterday, a new lawsuit was brought against BitConnect in federal court in Florida.  The judge in this case refused to enter a TRO freezing the defendants’ assets.  Following are the material parts of the decision: Plaintiffs argue that without the TRO, Defendants may “dissipate money generated from

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ICO, Litigation, US

Cryptocurrency Not Illegal in India

Last week, India’s Finance Minster, Arun Jaitley, made the following statement: The government does not recognize cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system in India As Forbes reports, this was reported by many as the banning of cryptocurrency in India but that seems to have been an overstatement. 

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Cryptocurrency, India