If you happened to prepare your own tax return this year or at least looked at the top of the first page, you might have noticed that the IRS has literally moved cryptocurrency transactions to the top. We recently published an article in Bloombergâs Tax Management Memorandum that looked at the aggressive moves the IRS is taking with respect to cryptocurrency. We looked at the disparate ways that the various U.S. government agencies define cryptocurrency,…
Early in the morning of June 9, 2021, President Nayib Bukele of El Salvador, 39, tweeted that the Salvadoran Congress had approved his proposed law that would make Bitcoin legal tender in El Salvador. The vote was 62 out of 84. El Salvador thus becomes the first country to approve the use of Bitcoin as legal tender. The country currently uses the U.S. Dollar as its currency. Bitcoin will become legal tender in 90 days,…
According to the Coinbase website, âstakingâ is âthe process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain. On these blockchains, anyone with a minimum-required balance of a specific cryptocurrency can validate transactions and earn Staking rewards.â On May 26, 2021, a Tennessee couple sued the IRS seeking a refund for taxes they paid on Tezos tokens that they earned through staking. As explained in their complaint: The Tezos public…
We have previously posted about how, in January 2020, the UK’s Financial Conduct Authority (FCA) became the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for cryptocurrency businesses in the UK. On December 16, 2020, the FCA announced that cryptocurrency businesses that had filed to register with the FCA could continue operating under a temporary licensing regime for six months as the regulator dealt with a backlog of applications. This was known as the Temporary Registrations…
The U.S. Securities and Exchange Commission announced on May 28, 2021 that it had filed an action against five individuals alleging that they promoted a global unregistered digital asset securities offering that raised over $2 billion from retail investors. These activities relate to BitConnect, which shut down its business in early 2018, shortly after, as we reported, the Texas State Securities Board issued a cease and desist letter. At that time, the regulator alleged that…
One of the byproducts of the initial coin offering craze was class action lawsuits that alleged that the underlying tokens were securities and that the securities law were violated because the offerings for those alleged securities did not comply with the securities laws. The US Securities and Exchange Commission continues to pursue cases for the improper sale of unregistered tokens. Not surprisingly, with the recent advent of the popularity of NFTs (non fungible tokens), a…
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 AGâs 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…