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David Zaslowsky

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On July 11, 2023, the Unites States Attorney’s office for the Southern District of New York announced that it had arrested Shakeeb Ahmed and charged him with wire fraud and money laundering in connection with his attack on a decentralized cryptocurrency exchange (the “Crypto Exchange”). Although the indictment did not identify the exchange, based on the facts described in the indictment, it has been reported that the hack was against Crema Finance, a decentralized cryptocurrency platform…

About two years ago, we wrote a post about actions being taken by the U.S. Internal Revenue Service (“IRS”) in connection with its concern that cryptocurrency owners were underreporting or failing to report gains. One such action was the use of John Doe summonses. The IRS issues a John Doe summons when it wants to obtain information about a group of unidentified taxpayers where it suspects many are non-compliant. If successful, a John Doe summons…

On June 27, 2023, the Official Committee of Unsecured Creditors (the “Committee”) in the BlockFi Chapter 11 bankruptcy reorganization case filed an Objection to the company’s Plan and essentially requested that the company be liquidated. The Official Committee is made up largely of 600,000 individual customers of BlockFi. The Committee based its position on the contention that the “the ‘reorganization’ case is over.” As it states, the Debtors’ investment bankers ran an extensive M&A process,…

BlockFi is a wealth management and trading firm for cryptocurrency holders that first commenced operations in 2017. In July 2021, we wrote about BlockFi’s bumpy road to going public, even though its valuation had just hit $5 billion. In February 2022, the SEC announced that BlockFi had agreed to pay $100 million in fines ($50 million to the SEC and $50 million to 32 states) to settle charges that it failed to register the offers…

On June 8, 2023, Judge Orrick of the Northern District California entered an Order and Default Judgment in a case the U.S. Commodity Futures Trading Commission (“CFTC”) brought against the Ooki DAO. The case has garnered a lot of attention because of issues it raised concerning whether a DAO (a decentralized autonomous organization) could be held liable for violating the law. Indeed, the CFTC issued a Statement that said: [I]n a precedent-setting decision, the court…

As we have discussed often in this space, Chairman Gary Gensler of the United States Securities and Exchange Commission has repeatedly expressed his view that most cryptocurrency tokens are unregistered securities and that, in his view, existing securities laws are clear enough for cryptocurrency firms to comply with them. The crypto industry has a different view and, among other things, has bemoaned the practice of the SEC’s labeling of certain tokens as investment contracts through…

There has been much publicity over the lawsuit brought against celebrities such as Tom Brady and Larry David for their endorsement of FTX. In that case, the judge refused a request to serve Shaquille O’Neal through social media platforms, including Twitter, based on O’Neal’s allegedly taking steps to avoid service. But there is a similar case in Miami, assigned to district judge Cecilia M. Altonaga, brought against Tom Nash and other social media influencers in…

Coinme is a company that started by making cryptocurrency transactions available through ATM machines. It originally used its own ATMs but, in January 2019, abandoned that business model and used, instead, the kiosks of the coin counting company, Coinstar. On April 28, 2023, the U.S. Securities and Exchange Commission announced settled charges with Coinme, its subsidiary Up Global, and CEO Respondent Neil Bergquist for conducting unregistered offers and sales of securities in the form of…

In the NFT (Non-Fungible Token) frenzy that swept the country a couple of years back, one of the collections that became among the most popular, and very valuable, is known as the Bored Ape Yacht Club (“BAYC”). Its creator, Yuga Labs, sued Ryder Ripps and Jeremy Cahen for trademark infringement. Ripps maintained that Yuga embedded racist and alt-right dog whistles in the BAYC NFTs. Defendants therefore created their own NFT collection, known as the Ryder…

On April 17, 2023, the U.S Securities and Exchange Commission charged crypto asset trading platform Bittrex, Inc. and its co-founder and former CEO William Shihara. with operating an unregistered national securities exchange, broker, and clearing agency. It also charged Bittrex, Inc.’s foreign affiliate, Bittrex Global GmbH, with failing to register as a national securities exchange in connection with its operation of a single shared order book along with Bittrex. The complaint was filed in federal court…