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May 2018

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On May 29 the Securities and Exchange Commission (“SEC”) announced it had obtained a court order halting the ICO of BAR, a coin developed by Michael Stollery, commonly known as Michael Stollaire, and his firm Titanium Blockchain Infrastructure Services.  The SEC also obtained an order approving an emergency asset freeze and the appointment of a receiver for Titanium Blockchain. In its complaint, the SEC alleged that Stollaire lied about business relationships with the Federal Reserve…

23 European countries have signed a Declaration on the establishment of a European Blockchain Partnership. The Partnership is intended to be a vehicle for cooperation amongst EU Member States to exchange experience and expertise in technical and regulatory fields and prepare for the launch of EU-wide blockchain applications across the Digital Single Market for the benefit of both the public and private sectors. The EU partners are keen to ensure that EU plays a leading…

In June 2015 New York leapt forward and introduced the BitLicense.  The BitLicense regulations prohibit companies from engaging in “virtual currency business activity” in New York, or with New York residents, without a license.  The idea is that the state will act as a gatekeeper for what is seen as high-risk business activity to ensure that companies dealing in virtual currency are structurally sound and have in place adequate protective measures, such as capital requirements…

In a press release issued on May 21, The North American Securities Administrators Association (NASAA)t announced one of the largest coordinated series of enforcement actions by state and provincial securities regulators in the United States and Canada to crack down on fraudulent ICOs, cryptocurrency-related investment products, and those behind them. NASAA members from more than 40 jurisdictions throughout North America participated in “Operation Cryptosweep,” which to date has resulted in nearly 70 inquiries and investigations…

On May 16, 2018 the European Parliament’s Committee on Research, Industry and Energy adopted a resolution on blockchain focused on making the EU a global leader in the development and adoption of blockchain. The resolution was proposed by Eva Kaili, Greek MEP, blockchain advocate and chair of the EU’s Science and Technology Options Assessment Panel which provides independent studies and information to help MEPs assess the impact of new technologies. The resolution advocates for the use…

As a way of educating the public, the SEC launched a website that offers a mock ICO.  It did so in the hopes of showing how easily people can be scammed.  Howey Coins (named, tongue-in-cheek for the Howey test used by the Supreme Court to determine whether an investment is a security) claimed to have a two-month return of over 72%, as well as celebrity testimonials.  Those who clicked on “Buy Coins Now” link were…

The UK government launched its first FinTech Sector Strategy in March 2018. One plank of its strategy was to create a Cryptoassets Task Force formed of representatives of the Treasury, the Bank of England, and the Financial Conduct Authority. The Task Force is intended to help the UK be at the forefront of harnessing the potential benefits of the new technology, while guarding against potential risks. In particular, the Task Force is expected to assess…

SEC-watchers regularly quote Chairman Clayton’s statement at a February 2018 Senate hearing (“I believe every ICO I’ve seen is a security”) as evidence of the SEC’s strict view of ICOs.  During a speech yesterday at the Medici Conference, SEC Commissioner Hester Pierce took a different tact.  Asking, rhetorically, whether ICOs offerings are securities that have to be registered or qualify for an exemption, she said that the answer should be rooted in the well-know Howey…

Defendants in this case created a cryptocurrency called Alibabacoin and used the Alibaba name on its alibabacoinwallet.com websites, Facebook page, and phone applications.  Online retailer Alibaba sued for infringement of its federally registered “Alibaba” mark.  Despite finding it that there was subject matter jurisdiction under the Lanham Act (the US federal trademark statute), the court denied Alibaba’s motion for a preliminary injunction without prejudice to renewal upon a showing of personal jurisdiction.  The court held…

In January, the New York Stock Exchange asked the Securities and Exchange Commission to allow it to list five bitcoin-related exchange-traded funds (ETFs) on one of its markets, according to an SEC filing.  Last week, the SEC issued an order indicating that it was going to take additional time to consider the application.  The SEC is soliciting written comments from the public to address 13 questions, including commenters’ views on whether the proposed funds would…