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…
Among the many areas of law that will have to continue to evolve around cryptocurrencies is the tax law. In the United States, as far back as 2014, the Internal Revenue Service issued Notice 2014-21 which clearly stated that virtual currency is treated as property for U.S. federal tax purposes. That meant, among other things that: Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on…
Much of the attention around Bitcoin in 2017 understandably focused on its meteoric price rise and overall volatility. But all that attention overlooks the fact that Bitcoin was initially intended to be used as a currency for buying things. Thus, the oft-reported story of the developer (Laszlo Hanyecz) who bought two pizzas in May 2010 for 10,000 Bitcoin ($140 million value today) in what is reported as the first bitcoin transaction in which someone bought…