Coinme Inc. describes itself as a company that started with a handful of Bitcoin ATMs but now has thousands, which is just one of the means by which it offers the public access to cryptocurrencies. In an Order dated October 25, 2024 and made public on November 4. 2024, Connecticut’s Banking Commissioner (the “Commissioner”) suspended Coinme’s ability to transfer money in Connecticut. Connecticut participated in a multistate examination of Coinme in 2023, along with Colorado,…
The Monetary Authority of Singapore (MAS) has taken a significant step towards regulating the burgeoning digital asset market by publishing a consultation paper setting out the regulatory regime that will apply to digital token service providers providing services outside of Singapore under the Financial Services and Markets Act (FSMA). The MAS first consulted on this regulatory regime in 2020. This was, among other enhancements to the existing regulatory framework, a response to the Financial Action…
On January 10, 2024, after 10 years of saying “no,” the United States Securities and Exchange Commission (SEC) approved the application for eleven spot Bitcoin exchange-traded funds (ETFs). Within four months, Bitcoin hit record highs and more than $30 billion was invested in the Bitcoin ETFs. Then, on May 23, 2024, the SEC surprised the crypto community when it effectively approved the sale of spot Ether ETFs (see here). Those ETFs started trading in late July…
In 2021, we reported that the United States District Court for the District of New Hampshire dismissed a lawsuit that sought to block the United States Internal Revenue Service’s effort to obtain records from cryptocurrency exchanges that included account information about individual accounts. In a decision on September 24, 2024, the First Circuit Court of Appeals affirmed that dismissal. The case concerned a 2019 episode in which the IRS sent about 10,000 letters to taxpayers…
We previously reported on the pre-emptive lawsuit that Consensys Software Inc., a software developer whose business centers on the Ethereum blockchain network, brought against the United States Securities and Exchange Commission in April 2024 in federal court in Texas. The Complaint may be found here. Three of the four counts in the Complaint relate to Consensys’s ETH transactions (ETH is the native token for the Ethereum blockchain). The fourth count relates to Consensys’s two MetaMask software products:…
Since the 1970s, the US has required certain banks and other financial institutions to report cash transactions of more than $10,000 under the Bank Secrecy Act (contained in Title 31 of the United States Code). In 1984, Congress enacted Section 6050I of the US Internal Revenue Code (contained in Title 26) to require reporting by any taxpayer who, in the course of a trade or business, receives more than $10,000 in cash in one or…
In a post two months ago, we discussed how the United States Securities and Exchange Commission surprised the crypto community on May 23, 2024 when it effectively set the stage for the sale of spot Ethereum Exchange-Traded Funds (ETFs) to begin in the not-too-distant future. That day has now arrived. On May 23, 2024, the SEC approved the 19b-4 form for a number of ETH ETF applications (form 19b-4 is a form that is used to inform…
In the United States, the Form 1099 has been used for years by investment firms to report investment income of their customers. As a result of final regulations (the “Final Regulations”) that the United States Internal Revenue Service issued on June 28, 2024, there will now be a Form 1099-DA (not yet released) on which custodial brokers will be required to report sales and exchanges of digital assets, including cryptocurrency. The reporting requirement will go…
In two earlier posts, we reported about Consensys filing a pre-emptive lawsuit against the United States Securities and Exchange Commission seeking, among other things, a declaration that (i) Ether is not a security and that, accordingly, the SEC’s investigation into Ether and Ethereum and any resulting enforcement actions exceed its regulatory authority; (ii) any enforcement action against Consensys premised on Ether being a security or Ether transactions being securities transactions would violate due process and…
The New York State Department of Financial Services (DFS), the state’s top financial regulator, views itself as the leading cryptocurrency state regulator in the country. Its regulatory scheme began with its introduction of the BitLicense, a set of regulations that prohibited companies from engaging in “virtual currency business activity” in New York, or with New York residents, without a license. Very few were actually applied for, and fewer still issued. Much has been written about how…