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Cryptocurrency

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On October 6, 2021, the U.S. Department of Justice announced the launch of the National Cryptocurrency Enforcement Team (NCET) “to tackle complex investigations and prosecutions of criminal misuses of cryptocurrency, particularly crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors.” Crypto mixing and tumbling services help users reduce traceability by obscuring the sources of their funds. As part of this announcement, the DOJ asserted that cryptocurrency is the “primary…

We recently reported about how U.S. Securities and Exchange Commission chairman Gary Gensler has made numerous comments concerning increased regulation over various aspects of the cryptocurrency industry. That same theme was part of his prepared remarks to Congress on September 14, 2021. The Chairman remarked that there was not enough investor protection in crypto finance, issuance, trading, or lending. He said: “[A]t this time, it’s more like the Wild West or the old world of…

This is an update to our previous posts about the cases that the SEC and New York State Attorney General brought against Coinseed, a company that purported to offer a mobile investment application that enabled users to invest in digital assets.   On September 13, 2021, the NY Attorney General announced that her office had obtained a judgment permanently enjoining Coinseed’s operations.  It was a default judgment. According to the AG, after a preliminary injunction had…

It was big news when the U.S. Senate recently passed the $1 trillion infrastructure bill. One aspect of that bill was a revenue raising provision aimed at the cryptocurrency industry. In an article that was just published in Bloomberg’s Tax Management Memorandum, we look at the nuts and bolts of that provision, and take a deeper dive into the criticism of the bill by the cryptocurrency community, as well as the failed attempt to modify the bill…

The New York State Department of Financial Services (DFS) is the department of the New York state government responsible for regulating financial services and products, including banking and financial services firms. On July 29, 2021 DFS Superintendent Linda A. Lacewell announced new action by DFS to promote diversity, equity and inclusion in the banking and non-depository financial industries. In the industry letter to New York-regulated banking institutions and New York-regulated non-depository financial institutions, DFS outlined its…

Early posts in this blog mentioned how former SEC Chairman Jay Clayton had famously told Congress in February 2018 that “I believe every ICO I’ve seen is a security.” His successor, Gary Gensler, resurrected those thoughts in his prepared remarks delivered on August 3, 2021 to the Aspen Security Forum: I think former SEC Chairman Jay Clayton said it well when he testified in 2018: “To the extent that digital assets like [initial coin offerings, or…

BlockFi is a wealth management and trading firm for cryptocurrency holders that first commenced operations in 2017. It has had a very busy few months. In March 2021, it reportedly closed a Series D funding that valued the company at $3 billion. Block recently reported that BlockFi is in talks to raise a new Series E funding round of $500 million, which would bring the company valuation to nearly $5 billion. It has also been…

As the Wall Street Journal reported, on June 21, 2021: “The People’s Bank of China …said it summoned representatives of multiple institutions—including state-owned commercial banks and Ant Group Co.’s Alipay—and told them to “strictly implement” recent notices and guidelines from authorities on curbing risks tied to bitcoin and cryptocurrency fundraising activities. It was the latest sign that Beijing is intensifying its crackdown on unregulated virtual currencies.” The PBOC Statement talked about how cryptocurrencies are used…

If you happened to prepare your own tax return this year or at least looked at the top of the first page, you might have noticed that the IRS has literally moved cryptocurrency transactions to the top. We recently published an article in Bloomberg’s Tax Management Memorandum that looked at the aggressive moves the IRS is taking with respect to cryptocurrency. We looked at the disparate ways that the various U.S. government agencies define cryptocurrency,…

We have previously posted about how, in January 2020, the UK’s Financial Conduct Authority (FCA) became the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for cryptocurrency businesses in the UK.  On December 16, 2020, the FCA announced that cryptocurrency businesses that had filed to register with the FCA could continue operating under a temporary licensing regime for six months as the regulator dealt with a backlog of applications.  This was known as the Temporary Registrations…