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…
It was no surprise when the SEC recently denied the most recent request for a spot Bitcoin ETF. That has been the SEC’s response to every such application ever made to it. This particular request was by VanEck, which had already had an earlier request denied as well. According to the SEC, generally speaking, the submission was not sufficiently structured to prevent fraud and manipulation. In language it has used before, the SEC said: The…
The recent decision rendered by Judge Victor Marrero of the Southern District of New York is of critical importance to the NFT industry. For the first time, a court held that the issuer of an NFT offered an “investment contract” and, therefore, can potentially be held liable for selling unregistered securities. The decision was made in the context of denying Dapper Lab’s motion to dismiss in Friel v Dapper Labs — meaning that, at the…
Since the beginning of blockchain and cryptocurrency, it was apparent that there would be emerging legal issues unique to them, while other legal issues would be applied in the same way as they have always been applied, but simply to a new technology. The case discussed in this post looks at the issue of personal jurisdiction through that prism. HEX is a cryptocurrency marketed as the first blockchain certificate of deposit. Defendant CoinMarketCap is a…
Just last week we wrote about the oft-visited subject of the refusal of the U.S. Securities and Exchange Commission (SEC) to approve a spot Bitcoin ETF, even though it has approved futures Bitcoin ETFs. And we noted that Grayscale Investments LLC (Grayscale) has appealed to the D.C. Circuit the SEC’s decision in its case, stressing the arbitrary nature of the SEC’s position concerning spot ETFs; oral argument is scheduled for March 7. On January 30,…
Nexo Financial LLC is a company that describes itself as a leading cryptocurrency institution offering a number of digital assets services through its website. It offered its customers, among other things, an Earn Interest Product (EIP), which allowed customers to lend certain digital assets in interest-bearing accounts. In a proceeding before the U.S. Consumer Financial Protection Bureau, Nexo argued in response to a civil investigative demand that the Bureau lacked jurisdiction because the Securities and Exchange…
We have followed for years the saga of the many applications for a spot Bitcoin ETF that have been denied by the U.S. Securities and Exchange Commission (SEC). See here and here. In April 2022, however, the SEC approved the Teucrium ETF — resting its decision on the fact that it was a futures ETF. But, unlike the earlier approved funds that had been filed under the 40 Act, Teucrium had filed under the Securities…
In previous posts, we addressed the interesting service of process issues that were the subject of a number of decisions in the lawsuit that the United States Commodity Futures Trading Commission (CFTC) brought against Ooki DAO (a DAO is a decentralized autonomous organization). But the case has also received a lot of attention for the larger issues of a proceeding against a decentralized organization and who might be liable for its acts. The court’s recent…
In an earlier post, we reported that Judge William Orrick of the Northern District of California had authorized service of process on Ooki DAO (a DAO is a decentralized autonomous organization) through a Help Chat Box on Ooki DAO’s website, with contemporaneous notice through an Online Forum linked through its website. In another post, we reported that the Judge Orrick subsequently required the CFTC also to serve process on two Token Holders once it was…