We recently reported about how U.S. Securities and Exchange Commission chairman Gary Gensler has made numerous comments concerning increased regulation over various aspects of the cryptocurrency industry. That same theme was part of his prepared remarks to Congress on September 14, 2021. The Chairman remarked that there was not enough investor protection in crypto finance, issuance, trading, or lending. He said: “[A]t this time, it’s more like the Wild West or the old world of…
This is an update to our previous posts about the cases that the SEC and New York State Attorney General brought against Coinseed, a company that purported to offer a mobile investment application that enabled users to invest in digital assets. On September 13, 2021, the NY Attorney General announced that her office had obtained a judgment permanently enjoining Coinseed’s operations. It was a default judgment. According to the AG, after a preliminary injunction had…
Although the heydays of the initial coin offering are now in the rearview mirror, the US Securities and Exchange Commission continues regulatory action against those accused of conducting ICO’s in violation of the securities laws. On September 8, 2021, the SEC charged Rivetz Corp., Rivetz International SEZC, and Steven K. Sprague, the head of both companies, with conducting an illegal, unregistered offering of securities through an ICO. According to the SEC’s complaint, between July and…
When President Biden appointed Gary Gensler to chair the U.S. Securities and Exchange Commission, many in the crypto community reacted positively. They thought that his MIT background, among other things, might usher in days of lighter regulation. But that has not been the case. For example, as we reported in July, he talked about more regulation of stablecoins and DeFi. And, the optimism that many had that the SEC would finally approve Bitcoin ETFs under…
It was big news when the U.S. Senate recently passed the $1 trillion infrastructure bill. One aspect of that bill was a revenue raising provision aimed at the cryptocurrency industry. In an article that was just published in Bloomberg’s Tax Management Memorandum, we look at the nuts and bolts of that provision, and take a deeper dive into the criticism of the bill by the cryptocurrency community, as well as the failed attempt to modify the bill…
BitMEX is one of the world’s largest cryptocurrency trading platforms. On August 10, 2021, the U.S. District Court for the Southern District of New York entered a Consent Order that the U.S Commodities Futures and Trading Commission agreed to with five companies charged with operating BitMEX. The order requires the BitMEX entities to pay a $100 million civil monetary penalty and provides that up to $50 million of the penalty may be offset by payments…
On August 6, 2021, the U.S Securities and Exchange Commission charged two Florida men and their Cayman Islands company with unregistered sales of more than $30 million of securities using smart contracts and decentralized finance (DeFi). The SEC said this was its first case involving securities using DeFi. According to the SEC’s order, Gregory Keough, Derek Acree, and their company Blockchain Credit Partners, offered and sold securities in unregistered offerings through DeFi Money Market (DMM)…
The New York State Department of Financial Services (DFS) is the department of the New York state government responsible for regulating financial services and products, including banking and financial services firms. On July 29, 2021 DFS Superintendent Linda A. Lacewell announced new action by DFS to promote diversity, equity and inclusion in the banking and non-depository financial industries. In the industry letter to New York-regulated banking institutions and New York-regulated non-depository financial institutions, DFS outlined its…
Early posts in this blog mentioned how former SEC Chairman Jay Clayton had famously told Congress in February 2018 that “I believe every ICO I’ve seen is a security.” His successor, Gary Gensler, resurrected those thoughts in his prepared remarks delivered on August 3, 2021 to the Aspen Security Forum: I think former SEC Chairman Jay Clayton said it well when he testified in 2018: “To the extent that digital assets like [initial coin offerings, or…
BlockFi is a wealth management and trading firm for cryptocurrency holders that first commenced operations in 2017. It has had a very busy few months. In March 2021, it reportedly closed a Series D funding that valued the company at $3 billion. Block recently reported that BlockFi is in talks to raise a new Series E funding round of $500 million, which would bring the company valuation to nearly $5 billion. It has also been…