In the context of a search warrant in a criminal case, the Fifth Circuit Court of Appeals in the United States held that the virtual currency exchange Coinbase was like a “traditional bank.” The details of the case, U.S. v Gratkowski, Case No. 19-50492 (5th Cir. June 30, 2020), are as follows. Richard Gratkowski became the subject of a federal investigation when federal agents began investigating a child-pornography website. To download material from the website,…
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…
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…
Summary On December 13 2019, in the case of AA v Persons Unknown [2019] EWHC 3556 (Comm), the UK Commercial Court granted an interim proprietary injunction over Bitcoin, thereby confirming its status as property. Background In October 2019, cyber-attackers hacked into the computer system of a Canadian insurance company and installed malware which encrypted those systems, preventing anyone but the hackers from accessing them. The hackers then offered decryption software to the insurance company in…
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…