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Cryptocurrency

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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…

We previously reported that, in July 2019, the U.S. Internal Revenue Service announced that it had begun sending the now infamous letters to taxpayers who, supposedly, may have failed to properly report income and pay taxes associated with cryptocurrency transactions. About 10,000 of these Letter 6173 were sent. And we previously reported that James Harper had sued the IRS claiming the IRS violated his rights under the Fourth and Fifth Amendments of the U.S. Constitution…

On February 17, 2021, the U.S. Securities and Exchange Commission announced charges against Coinseed, a company that purported to offer a mobile investment application that enabled users to invest in digital assets, and its co-founder and Chief Executive Officer, Delgerdalai Davaasambuu, in connection with Coinseed’s offer and sale of digital asset securities. According to the SEC’s complaint, from at least December 2017 to May 2018, Coinseed and Davaasambuu sold digital asset securities called “CSD tokens”…

We previously reported that India’s Parliament was going to be considering legislation that would largely ban the use of private cryptocurrency.  Bloomberg is now reporting that cryptocurrency investors in India will be given a transition period of three-to-six months after the implementation of the new law to liquidate their investments.  While banning cryptocurrencies, the Indian government will allow the use of technology underlying the cryptocurrency for research. We also reported on the strict steps the…

In a February 5, 2021 letter, the Central Bank of Nigeria (CBN) warned all banks in the country that that they are prohibited from dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges. Thus, all banks and other financial institutions were directed to identify persons transacting in or operating cryptocurrency exchanges and make sure that such accounts were closed. The letter included a warning that breaches of the directive would “attract severe regulatory sanctions.” After…