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David Zaslowsky

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The U.S. Commodity Futures Trading Commission announced on April 20 that it had issued an Order of Designation to Bitnomial Exchange, LLC located in Chicago, Ill., granting it status as a designated contract market (DCM). As a result, Bitnomial joins a small number of other companies able to offer Bitcoin futures and option contracts. According to Bitnomial’s press release, “The approval allows Bitnomial to tackle a confluence of generational shifts in financial markets: First, a…

The U.S. Commodity Futures Trading Commission (CFTC) filed a complaint, on April 16, in the U.S. District Court for the Middle District of Florida, charging defendants Alan Friedland of Florida and his Florida-based companies, Fintech Investment Group, Inc. (Fintech) and Compcoin LLC, with fraudulently soliciting more than $1.6 million from their customers in connection with a leveraged or margined off-exchange foreign currency (forex) scheme. According to the complaint, starting in at least 2016 and proceeding through 2018, Friedland and his companies fraudulently…

The U.S. Securities and Exchange Commission filed charges on April 2, 2020 against Texas resident and former pastor Larry Donnell Leonard, II, his wife Shuwana Leonard, and two related entities for defrauding hundreds of retail investors. The SEC’s complaint alleges that the Leonards and two companies they control, Teshuater, LLC and Teshua Business Group, LLC, targeted investors in the African-American community with three separate fraudulent offerings, raising nearly $500,000 from over 500 investors across the…

In a decision dated March 24, 2020, Judge Kevin Castel of the Southern District of New York granted a preliminary injunction request by the U.S. Securities and Exchange Commission preventing the distribution to purchasers of $1.7 billion worth of cryptocurrency called “Grams.” In 2018, Telegram sold “interests in Grams” to 175 entities and high-net-worth individuals. These “Gram Purchase Agreements” entitled the initial purchasers to receive an allotment of Grams upon launch of the TON Blockchain.…

On March 20, 2020, the district court unsealed the file in a case that U.S. Securities and Exchange Commission brought against three individuals accused of bilking investors inside and outside the U.S. The case was initially filed under seal because the Commission sought, and obtained, an asset freeze and other emergency relief to halt an ongoing securities fraud (as claimed by the Commission). The SEC’s complaint alleges that Florida residents Robert Dunlap and Nicole Bowdler…

In April 2018, India’s central bank, the Reserve Bank of India (RBI), banned domestic financial institutions from providing banking services to cryptocurrency exchanges. The Statement issued at that time provided: “It has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling [cryptocurrencies]. Regulated entities which already provide such services shall exit the relationship within a specified time.” …

In a January 14, 2020 filing with the U.S. Securities and Exchange Commission (SEC), Bitwise Asset Management requested the withdrawal of its application for a cryptocurrency-linked exchange traded fund (ETF). This came after the SEC had rejected Bitwise’s proposal in October 2019. On February 26, 2020, the SEC issued an Order that rejected the request by Wilshire Phoenix for a Bitcoin-based ETF. The SEC’s reasoning was similar to what it had said in 2019 with…

On February 19, 2020, the U.S. Securities and Exchange Commission announced that it had settled charges against blockchain technology startup Enigma MPC for conducting an unregistered offering of securities in the form of an initial coin offering (ICO). Enigma, based in San Francisco and Israel, has agreed to return funds to harmed investors and to other relief. According to the SEC’s order, Enigma raised approximately $45 million from sales of its digital assets (called ENG…

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…