On April 14, 2023, the United States Securities and Exchange Commission (“SEC”) reopened the comment period and provided supplemental information on proposed amendments to Rule 3b-16 under the Securities Exchange Act of 1934 (“Exchange Act”) which defines certain terms used in the definition of “exchange” in Section 3(a)(1) of the Exchange Act.. The reopening is primarily intended to address the significant comments received by the SEC in response to the initial proposal, many of which…
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…
In July 2022, the Law Commission published a consultation proposing certain reforms in respect of property rights and digital assets. The consultation’s primary recommendation was to create a new category of property, referred to as data objects, to ensure that cryptocurrency and other forms of digital assets could be legally recognised as property. This approach builds upon previous court rulings which held that cryptoassets could be property and be protected by injunctions, such as freezing…
On April 7, 2022, the US Federal Deposit Insurance Corporation (FDIC) issued a Financial Institution Letter (“FIL”) requiring that all FDIC-supervised institutions that intend to engage in, or that are engaged in, any activities involving or related to crypto assets notify the FDIC. Because the overwhelming majority of U.S. banks are insured by the FDIC, the FIL means that nearly all banks must now disclose their crypto activities to the FDIC. The definition of crypto…
On January 17, 2022, the Spanish Official State Gazette (BOE) published the new Circular 1/2022 of the National Securities Market Commission (CNMV) on the advertising of cryptoassets presented as investments (the Circular). The Circular is aimed at developing the rules, principles and criteria to which cryptoasset advertising will be subject. It defines the types of entities and assets included in its scope and the powers granted to the CNMV, so it can supervise and control…
On 31 March 2021, the UK tax authorities (HMRC) consolidated their existing guidance on crypto-asset taxation for businesses and individuals and published new guidance on the taxation of “staking” activities. This is contained in a new manual (guidance for HMRC officers which is publicly available online but which does not have the force of law). The new guidance on staking activities is almost identical to the existing guidance on mining, but the fact that HMRC…
On 7 January 2021 HM Treasury (HMT) published a consultation and call for evidence on the regulatory approach to cryptoassets and stablecoins. The consultation represents the first stage in HMT’s consultative process on the broader regulatory approach to cryptoassets and stablecoins. The consultation closed on 21 March 2021. Baker McKenzie’s crypto regulatory experts have published a briefing that explores the policy background underlying the consultation, sets out the key points of HMT’s proposals, and provides a comparison to…
Since the ICO boom in 2017, governments around the world began settling on different approaches to regulating the crypto industry. Many legislatures and regulators proactively drafted new laws, regulations, guidance and frameworks for the crypto industry. Others used investigatory authorities and enforcement actions to regulate the industry. We expect that governments around the world will remain active for the foreseeable future as cryptoassets become more mainstream. Baker McKenzie’s new guide, Crypto around the World, presents…
In Ion Science Ltd. v Persons Unknown and others (unreported), the Commercial Court granted a proprietary injunction and a worldwide freezing order in respect of Bitcoin that had been dissipated by the wrongdoers due to cyber-fraud. The Commercial Court also granted permission to serve disclosure orders against the coin exchanges that processed the transactions in order to help locate the missing assets and wrongdoers. This judgment further solidifies Bitcoin’s status as property, but also shows…
The UK Financial Conduct Authority (FCA) has announced a ban on the sale of crypto-derivatives and exchange traded notes (ETNs) that reference certain types of crypto-assets (crypto-ETNs) to retail consumers. Firms who carry out marketing, distribution or selling activities in or from the UK of the relevant products to retail clients, will need to comply with these rules by 6 January 2021. The FCA’s policy statement and final rules can be found here. Which assets…