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 and operates as an ‘exchange,’…
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, the district court held that,…
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 listing of bitcoin cash. The…
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 customers to buy goods across…
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, those warnings have now been…
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 customer and when the reporting…