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January 2020

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We have previously written about how U.S. states have, one by one, passed legislation relating to blockchain. As we enter 2020, Illinois has become the latest state to do so. The Blockchain Technology Act took effect on January 1, 2020. Under the Act, “blockchain” is defined as “an electronic record created by the use of a decentralized method by multiple parties to verify and store a digital record of transactions which is secured by the…

On January 8, 2020, the SEC announced that it had charged Donald G. Blakstad and two entities he controlled with engaging in the fraudulent offer and sale of over $3.5 million of securities. The SEC’s complaint alleges that, between July 2015 and May 2019, Blakstad induced investors to purchase the securities of companies he controlled, including both Energy Sources International Corporation and Xact Holdings Corporation, by making materially false and misleading statements and omissions about…

We have previously reported on the SEC’s case against Longfin Corp and its founding CEO and controlling shareholder, Venkata Meenavalli.  The SEC’s complaint alleged that Longfin and Meenavalli obtained qualification for a Regulation A+ offering by falsely representing in public filings that the company was managed and operated in the U.S.  According to the complaint, Longfin and Meenavalli then distributed over 400,000 Longfin shares to Meenavalli’s affiliates, and misrepresented the offering to Nasdaq in order to meet…

On October 9, 2019, the U.S. tax authority (the Internal Revenue Service or “IRS”) released Revenue Ruling 2019-24 providing guidance on the U.S. income tax treatment of hard forks and airdrops of cryptocurrency (see our prior post about this guidance).  On December 20, 2019, eight members of the U.S. Congress sent a letter to the Commissioner of the IRS stating that they were “concerned that this recent guidance raises many new questions related to the…

Effective as of December 27, 2019, the Bahamas went live with its central bank digital currency (“CBDC” ) platform, known as the Sand Dollar.  It will undergo a pilot phase testing in Exuma, which will be extended in the first half  of 2020 to Abaco.  According to the outline published by the Central Bank of the Bahamas, the Sand Dollar is a digital fiat currency, not a cryptocurrency: A digital fiat currency would not be…