Celebrities Mayweather and Khaled, Fined by the SEC, But Dismissed from Private Civil Lawsuit

We previously reported that, in November 2018, in a first of its kind case, the SEC charged  celebrities DJ Khaled and Floyd Mayweather with touting violations involving ICOs. Without admitting or denying the findings, Mayweather and Khaled agreed to pay disgorgement, penalties and interest.  One of the ICOs that they touted was Centra Tech.  They were also sued for securities law violations in a civil case brought by Centra Tech investors.

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ICO, Litigation, Touting, US

FinCEN Issues Guidance and Advisory on Convertible Virtual Currencies

On May 9, 2019, the U.S. Financial Crimes Enforcement Network (FinCEN) issued guidance on the application of Bank Secrecy Act (BSA) regulations, specifically those regulations applicable to money services businesses (MSBs), to certain business models involving the transmission of convertible virtual currencies (CVCs) (the “Guidance”).  The Guidance follows previous interpretive guidance issued by FinCEN in 2013 relating to transactions involving the acceptance of currency or funds and the transmission of

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Cryptocurrency, FinCEN, US

FinCEN’s First Enforcement Action Against P2P Virtual Currency Exchanger

On April 18, 2019, the Financial Crimes Enforcement Network (FinCEN), an arm of the U.S. Department of the Treasury assessed a civil money penalty against Eric Powers for willfully violating the Bank Secrecy Act’s (BSA) registration, program, and reporting requirements. This was FinCEN’s first enforcement action against a peer-to-peer virtual currency exchanger and the first instance in which it has penalized an exchanger of virtual currency for failure to file Currency Transaction

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Bitcoin, Currency Exchange, FinCEN, US

Bitcoin Dealer Sentenced to Two Years in Prison and Ordered to Forfeit Ill-Gotten Gains

On April 8, 2019, Jacob Burrell Campos of Rosarito, Mexico, was sentenced to two years in prison and to forfeit USD 823,357 in illicit profits for operating an unlicensed money transmitting business in connection with his sale of hundreds of thousands of dollars in Bitcoin to over 1,000 customers throughout the United States.  Burrell, a U.S. citizen, pleaded guilty, admitting that he operated a Bitcoin exchange without registering with the

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AML, Criminal, KYC, Money Transmitter, US

New York State Denies Bittrex Request for BitLicense

We have previously written about New York’s BitLicense regulations, which prohibit companies from engaging in “virtual currency business activity” in New York, or with New York residents, without a license.  Bittrex, based in the State of Washington, is one of the more established cryptocurrency exchanges.  On April 10, 2019, the New York State Department of Financial Services (“DFS”) published a letter denying Bittrex’s BitLicense application. According to the DFS press release,

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AML, BitLicense, Cryptocurrency, New York

The Gibraltar Stock Exchange Set To Offer Digital Debt Securities and Funds

The Gibraltar Stock Exchange (GSX) is set to become among the world’s first stock exchanges to offer the listing services of digital debt securities and digital funds. The GSX announced on April 9, 2019 that it would begin listing of these new products, known as ‘digital’, ‘smart’ or ‘tokenised’ securities, such as Corporate Bonds, Convertible Bonds, Asset Backed Securities, Derivative Securities, Open-Ended Funds, Closed-Ended Funds, utilizing Distributed Ledger Technology (DLT), under its current

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Gibraltar, GSX, Tokenized Securities

SEC Issues its First Cryptocurrency No-Action Letter

In a first, on April 3, 2019, the US Securities and Exchange Commission issued its first cryptocurrency No-Action Letter.  The Letter was issued to TurnKey Jet Inc. (“TKJ”), a jet-leasing business. The company will issue the TKJ digital tokens to people who sign up for its membership program and the members can then use the tokens to charter a private jet.  Based on the Letter, TKJ may offer and sell

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Cryptocurrency, No-Action Letter, SEC, US

Switzerland’s Third Largest Bank Plans to Introduce Crypto-Related Services

The trend of established banks partnering with technology companies to offer digital asset-related services continues in Switzerland.  Around the end of February 2019, Julius Baer, one of Switzerland’s largest and oldest banks, announced plans to offer access to digital assets through a partnership with SEBA Crypto, a Swiss-based start-up. This development follows similar arrangements between technology companies and other established banks such as Falcon Private Bank, Vontobel, and Gazprombank. This

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Banking, Cryptoassets, Regulation, Switzerland

Foreign Trading Platform and Its CEO to Pay $990,000 for Illegal Bitcoin-Related Transactions with U.S. Customers

On March 11, 2019, the U.S. Commodity Futures Trading Commission (CFTC) announced that it had entered into a Consent Order resolving a CFTC action against 1pool Ltd., located in the Marshall Islands, and its chief executive officer and owner, Patrick Brunner, for illegally offering retail commodity transactions that were margined in bitcoin, failing to register as a futures commission merchant (FCM), and failing to meet its supervisory duties by not

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Distributed Ledger Technologies and Smart Contracts in Italy

The Italian Parliament recently introduced distributed ledger technologies (DLTs) into the Italian legal system. Law Decree No. 135/2018 – which was passed into law on February 7 by the Italian Parliament – provides a precise definition of DLTs as “technologies and IT protocols using a shared, distributed, replicable and simultaneously accessible ledger, decentralized and encrypted, which enable the registration, validation, updating and storage of data, whether encrypted or not, which

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Distributed Ledger Technology, Italy, Smart Contracts