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Bitcoin

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On April 21, 2019, the English High Court ruled that it would have jurisdiction to hear the case of Ramona ANG v Reliantco Investments Ltd, following its determination that speculative investments, in this case Bitcoin futures, are not inherently a business activity. Therefore, the protections afforded to consumers under EU law (the Brussels Regulation (Recast) No 12/5/2012 (the “Regulation”) to bring claims via the courts in their own jurisdictions could apply to individual investors using…

On April 18, 2019, the Financial Crimes Enforcement Network (FinCEN), an arm of the U.S. Department of the Treasury assessed a civil money penalty against Eric Powers for willfully violating the Bank Secrecy Act’s (BSA) registration, program, and reporting requirements. This was FinCEN’s first enforcement action against a peer-to-peer virtual currency exchanger and the first instance in which it has penalized an exchanger of virtual currency for failure to file Currency Transaction Reports (CTRs). Powers advertised his…

On Jan. 14, 2019, Danish tax agency Skattestryrelsen received authorization from the nation’s tax council to collect two years of cryptocurrency trading information from three Danish crypto exchanges to ensure that its citizens have paid correct taxes. The three exchanges must now provide the tax agency with information on all purchases and sales of cryptocurrencies – including Bitcoin – made by their customers during the period from Jan. 1, 2016 through Dec. 31, 2018. Customer…

This week HM Revenue & Customs (“HMRC”), the UK’s tax authority, set out its view on how individuals should be taxed when handling cryptoassets which can be used as a method of payment, such as Bitcoin. There are no significant surprises in HMRC’s guidance, which relies on existing principles to determine whether income tax or capital gains tax applies. However, when dealing with cryptoassets, individuals should be aware that they may be subject to additional record keeping obligations and may be required to submit a self assessment tax return in some cases.

Up to now, the Swiss Financial Market Supervisory Authority (FINMA) has taken no official position on how to consider cryptoassets for the Basel III capital requirements or liquidity ratios for banks and securities dealers. According to current media reports, however, FINMA is said to have revealed its practice on the issue in a confidential letter sent to EXPERTsuisse, an association representing Swiss trustees and accountants, on October 15, 2018. The following is a summary of…

On 22 November 2018, there was a first at SIX Swiss Exchange: Swiss-based startup Amun AG obtained the first license worldwide to offer an Exchange Traded Product (ETP) based on multiple crypto-currencies on a regulated stock exchange. The ETP gives investors access to a diversified, weighted and automatically re-balanced basket of the top four most liquid crypto-assets: Bitcoin, Ripple, Ethereum and Litecoin. Each cryptocurrency was allocated a certain share within the fully secured ETP, with…

Our blog reports on blockchain developments around the world and across industries. For those of our readers interested in some blockchain basics, Baker McKenzie has just published “Unhashing Blockchain: Blockchain Explained.”  In it, we provide an overview of blockchain technology, discuss how it is being used and identify the legal issues that will arise (or have already arisen) in connection with this nascent technology.

Last year, the SEC rejected an application by Cameron and Tyler Winklevoss for what would have been the first-ever Bitcoin ETF.  The group made some changes and resubmitted their application in June.  In a release yesterday, the SEC rejected the revised request as well. The exchange that sought to list the Winklevoss’s ETF had argued that Bitcoin trading is too decentralized across the globe for fraudsters to manipulate the price.  The SEC found that the…

Last month we reported on an SEC decision to take additional time to consider whether to approve a request to list five Bitcoin-related exchange-traded funds (ETFs) on one of the New York Stock exchange markets.  That pattern is now being repeated.  On December 4, 2017, NYSE Arca, Inc. filed with the SEC a proposed rule change to list and trade the shares of the ProShares Bitcoin ETF and the ProShares Short Bitcoin ETF.  On March…

On 11 June, the UK’s financial services regulator, the Financial Conduct Authority (FCA), published a “Dear CEO letter” providing guidance on how banks should handle the financial crime risks associated with cryptoassets. The FCA is concerned that cryptoassets are being used in criminal activities such as money laundering or terrorist financing. The regulator expects banks to take reasonable and proportionate measures to lessen the risk of facilitating such crimes. The FCA notes that where banks…