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David Zaslowsky

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In February, we reported that both the U.S. Securities and Exchange Commission and the New York Attorney General had brought proceeding against Coinseed, a company that purported to offer a mobile investment application that enabled users to invest in digital assets. On May 7, 2021, the AG’s office filed a motion asking the court for a temporary restraining order, a preliminary injunction, and the appointment of a receiver to immediately block Coinseed and its CEO from…

This blog has previously reported on the numerous enforcement actions taken by the U.S. Securities and Exchange Commission against unregistered token sales. History, was made, however, on May 3, 2021 when INX Limited announced that it had officially closed its IPO with an estimated $85 million in gross proceeds from token sales, received from over 7,200 institutional and general public (retail) investors. INX is the world’s first company to debut and successfully complete an SEC-registered IPO of…

Depending on the particular branch of the U.S. government one is talking to, cryptocurrency can be property (IRS), a security (SEC) or a commodity (CFTC). On April 20, 2021, the U.S. House of Representatives passed a bill aimed at remedying this situation. The bipartisan Eliminate Barriers to Innovation Act will establish a digital asset working group to ensure collaboration between regulators and the private sector to foster innovation. The new law will require the SEC and CFTC to…

In 2013, the U.S. Securities and Exchange Commission was asked for the first time to approve a Bitcoin exchange-traded fund.  That request was denied.  More than a dozen other applications followed, each resulting in denial.  With at least six applications pending, and a number of changed circumstances, it is hoped that the SEC is finally ready to approve Bitcoin ETFs.  For a more detailed discussion of the state of play of Bitcoin ETFs, you can…

On April 16, 2021, the Turkish Central Bank issued a statement relating to crypto assets.  It said that cryptoassets entail significant risks because: (i) they are neither subject to any regulation nor supervision mechanisms nor a central regulatory authority, (ii) their market values can be excessively volatile, (iii) they may be used in illegal actions due to their anonymous structures, (iv) wallets can be stolen or used unlawfully without the authorization of their holders, and…

In a previous post, we explained how the U.S. Internal Revenue Service had introduced a question on the 2020 tax form that asked, “at any time during 2020 did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency.” Along another path, the IRS’s Operation Hidden Treasure is a partnership between the civil office of fraud enforcement and the criminal investigation unit aimed at rooting out tax evasion from cryptocurrency owners. …

On March 29, 2021, the U.S. Securities and Exchange Commission charged LBRY, a blockchain company, with conducting an unregistered offering of digital asset securities. According to the SEC’s complaint, from at least July 2016 to February 2021, LBRY, which offers a video sharing application, sold digital asset securities called “LBRY Credits” to numerous investors, including investors based in the U.S. The complaint alleges that LBRY did not file a registration statement for the offering, and…

A federal judge in Canada issued an Order compelling Coinsquare Ltd to divulge customer details to the Canada Revenue Agency. Coinsquare is a crypto-exchange based in Toronto. In a statement posted to its blog, Coinsquare characterized the result as a “significant victory.” According to Coinsquare, instead of providing the CRA with all client data dating back to 2013 as was initially requested, Coinsquare and the CRA agreed that information relating to 90-95% of the clients…

We previously reported that, in July 2019, the U.S. Internal Revenue Service announced that it had begun sending the now infamous letters to taxpayers who, supposedly, may have failed to properly report income and pay taxes associated with cryptocurrency transactions. About 10,000 of these Letter 6173 were sent. And we previously reported that James Harper had sued the IRS claiming the IRS violated his rights under the Fourth and Fifth Amendments of the U.S. Constitution…

The U.S. Securities and Exchange Commission announced on March 11, 2021 that it filed an emergency action and obtained a temporary restraining order and asset freeze against Shawn Cutting of Sandpoint, Idaho. According to the SEC’s complaint, from October 2017 through at least May 2020, Cutting raised at least $6.9 million from over 450 investors by representing that he would pool investor monies into a fund that invested in various digital assets. The complaint alleges…