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David Zaslowsky

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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…

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…

On December 18, 2019, the U.S. Securities and Exchange Commission announced that it had settled charges against blockchain technology company Blockchain of Things Inc. (BCOT) for conducting an unregistered initial coin offering of digital tokens. According to the SEC’s Order, BCOT raised nearly $13 million to develop and implement its business plans, including developing its blockchain-based technology and platform.  As noted in the SEC’s Order, BCOT explained that its platform was intended to allow third-party…

Two firms – cryptocurrency mining pool Simplecoin and bitcoin gaming platform Chopcoin – are shutting down as a result of the upcoming EU anti-money laundering rules.   AMLD5, the EU’s 5th anti-money laundering directive, will come into effect on January 10, 2020.  Among the changes AMLD5 brings about are an expanded scope for regulation regarding crypto platforms and wallets, centrally determined obligations for performing AML due diligence, stricter identification requirements for pre-paid card purchases, and the end…

On November 6, 2019, U.S. prosecutors in the Southern District of New York announced charges against Asa Saint Clair for his participation in an investment scheme tied to a purported digital coin offering called IGOBIT.  Saint Clair allegedly participated in a scheme to defraud victims into providing loans tied to the launch of IGOBIT by World Sports Alliance, a purported intergovernmental organization focused on promoting international development through sports, and falsely promised investors guaranteed returns…

On October 11, 2019 the U.S. Securities and Exchange Commission announced that it has filed an emergency action and obtained temporary restraining order against two offshore entities conducting an alleged unregistered, ongoing digital token offering in the U.S. and overseas that has raised more than $1.7 billion of investor funds. According to the SEC’s complaint, Telegram Group Inc. and its wholly-owned subsidiary TON Issuer Inc. began raising capital in January 2018 to finance the companies’…

Last December, the Commodity Futures Trading Commission (CFTC) issued  a public call for feedback to “better inform the Commission’s understanding” of the Ethereum network and the cryptocurrency ether.  The CFTC said input would better inform the agency in the event that market participants submit proposals to list new cryptocurrency-based futures or derivatives products. The CFTC has already recognized the trading of Bitcoin-based derivatives. Speaking at the Yahoo! Finance All Markets Summit on Thursday October 10, and as reported by…

The Bank of The Republic of Burundi issued a statement in which it banned the use of cryptocurrencies in the country. The Statement said, “Since virtual currencies or cryptocurrencies are not regulated and are not issued or guaranteed by any Government or Central Bank, these currencies do not have legal tender in the territory of Burundi.” The measure was justified as a consumer protection measure: “virtual currencies are traded on unregulated online platforms around the…