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Cryptocurrency

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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…

It has been widely noted that the new Chairman of the Securities and Exchange Commission in the U.S., Gary Gensler, is much more tech savvy that his predecessor. Gensler has taught at MIT on topics such as blockchain technology, digital currencies, financial technology, and public policy. Last week, Gensler addressed his views on the regulation of cryptoassets in two public appearances. On May 6th, Gensler testified before Congress for the first time as Chairman. …

In February, we reported that both the U.S. Securities and Exchange Commission and the New York Attorney General had brought proceeding against Coinseed, a company that purported to offer a mobile investment application that enabled users to invest in digital assets. On May 7, 2021, the AG’s office filed a motion asking the court for a temporary restraining order, a preliminary injunction, and the appointment of a receiver to immediately block Coinseed and its CEO from…

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…

On April 16, 2021, the Turkish Central Bank issued a statement relating to crypto assets.  It said that cryptoassets entail significant risks because: (i) they are neither subject to any regulation nor supervision mechanisms nor a central regulatory authority, (ii) their market values can be excessively volatile, (iii) they may be used in illegal actions due to their anonymous structures, (iv) wallets can be stolen or used unlawfully without the authorization of their holders, and…

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…