Texas Renews its Cryptocurrency Crackdown

Texas has been one of the more active states in the United States when it comes to cryptocurrency enforcement.  The Texas State Securities Board was the first state securities regulator to enter an enforcement order against a cryptocurrency firm and, to date, the Securities Commissioner has entered 24 administrative orders involving 62 individuals and entities. In June, the State Securities Board started an investigative sweep of suspect cryptocurrency offerings after the price of bitcoin nearly

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Cryptocurrency, Texas

IOSCO Publishes Consultation on how Crypto Trading Platforms are Regulated

IOSCO (the International Organization of Securities Commissions)  has recently published a consultation focusing on how platforms which trade crypto-assets are regulated. The global standards setting body considers that promoting innovation must be balanced with appropriate regulatory oversight. For these purposes, IOSCO defines crypto-assets broadly as “a type of private asset that depends primarily on cryptography and DLT or similar technology as part of its perceived or inherent value, and can

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Cryptoassets, IOSCO

SEC and FINRA Issue Joint Statement on Broker-Dealer Custody of Digital Asset Securities

On July 8, 2019, the staffs of the U.S. Securities and Exchange Commission’s Division of Trading and Markets and the Financial Industry Regulatory Authority (“FINRA”)  issued a joint statement articulating various considerations relevant to questions they had received concerning the application of the federal securities laws and the rules of FINRA to the potential intermediation—including custody—of digital asset securities and transactions. At the outset, the Statement made clear that novel

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Cryptoassets, FINRA, SEC, SIPA, US

Class Action Against Crypto Mining Scheme Moves Forward

On June 21, 2019 a Connecticut federal judge certified a class of alleged victims of a cryptocurrency mining Ponzi scheme.  Class certification is another step forward in providing legitimate avenues of restitution for those who have been defrauded by cryptocurrency schemes. The suit, led by Denis Marc Audet, alleges that GAW Miners LLC, ZenMiner LLC, and Stuart Fraser (who allegedly had control of the two companies) defrauded him and thousands

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Class Action, Cryptocurrency, Litigation, US

Australian Regulator Provides Update to ICO and Crypto-asset Information

Background The Australian Securities and Investments Commission (ASIC) has released an update to Information Sheet 225 Initial coin offerings and crypto-assets (INFO 225). These updates follow the Australian Treasury’s release of its issues paper in January this year, and a subsequent consultation period with stakeholders. Baker McKenzie was involved in the consultation process and delivered a written submission addressing token categorisation, secondary trading in the ICO market, and the current

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Australia, ICO

Liechtenstein Government Announces New Blockchain Act

On May 7, 2019 the Liechtenstein government reported that it passed a motion to implement a new law on Tokens and VT Service Providers (generally referred to as the “Blockchain Act”). In recent times we have seen various European jurisdictions introduce regulation or publish regulatory guidance concerning specific aspects of blockchain technologies,  However, Liechtenstein considers that its  Blockchain Act is the first to create a holistic regulatory framework for the

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Cryptocurrency, Liechtenstein

UK Jurisdiction Taskforce Launches Consultation on Cryptoassets, Distributed Ledger Technologies and Smart Contracts

The UK Jurisdiction Taskforce (“UKJT“) recently published a consultation paper on the status of cryptoassets, DLT, and smart contracts under English private law. The UKJT is one of the six taskforces of the LawTech Delivery Panel created by the Law Society of England and Wales. The LawTech Delivery Panel was set up in October 2018 and is formed of a team of industry experts and leading figures from government and the

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Cryptoassets, Cryptocurrency, Distributed Ledger Technology, Smart Contracts, UK

FATF is Anticipated to Issue Global Standards for Regulating Certain Cryptocurrency-Based Services in June 2019

During a speech at Consenus 2019, Sigal Mandelker, the U.S. Treasury’s Under Secretary for Terrorism and Financial Intelligence, reiterated the projection that the Financial Action Task Force (“FATF”) will adopt international standards for cryptocurrency-based services in June 2019.  FATF (also known by its French name, Groupe d’action financière) is an independent inter-governmental body that develops global standards for anti-money laundering and counter-terrorist financing. In 2014 and 2015 FATF began expressing

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AML, Banking, Cryptocurrency, FATF

English High Court Rules on Cryptocurrency Investments

On April 21, 2019, the English High Court ruled that it would have jurisdiction to hear the case of Ramona ANG v Reliantco Investments Ltd, following its determination that speculative investments, in this case Bitcoin futures, are not inherently a business activity. Therefore, the protections afforded to consumers under EU law (the Brussels Regulation (Recast) No 12/5/2012 (the “Regulation“) to bring claims via the courts in their own jurisdictions could

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Bitcoin, Consumer Law, Cryptocurrency, UK

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

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