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 Reports (CTRs). Powers advertised his…
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 Financial Crimes Enforcement Network (FinCEN)…
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, the application was denied primarily…
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 licensing permissions, on the GSX…
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 its tokens without registration under…