Texas has been one of the more active states in the United States when it comes to cryptocurrency enforcement. The Texas State Securities Board was the first state securities regulator to enter an enforcement order against a cryptocurrency firm and, to date, the Securities Commissioner has entered 24 administrative orders involving 62 individuals and entities. In June, the State Securities Board started an investigative sweep of suspect cryptocurrency offerings after the price of bitcoin nearly tripled over a period of…
On June 21, 2019 a Connecticut federal judge certified a class of alleged victims of a cryptocurrency mining Ponzi scheme. Class certification is another step forward in providing legitimate avenues of restitution for those who have been defrauded by cryptocurrency schemes. The suit, led by Denis Marc Audet, alleges that GAW Miners LLC, ZenMiner LLC, and Stuart Fraser (who allegedly had control of the two companies) defrauded him and thousands like him in violation of…
On May 7, 2019 the Liechtenstein government reported that it passed a motion to implement a new law on Tokens and VT Service Providers (generally referred to as the “Blockchain Act”). In recent times we have seen various European jurisdictions introduce regulation or publish regulatory guidance concerning specific aspects of blockchain technologies, However, Liechtenstein considers that its Blockchain Act is the first to create a holistic regulatory framework for the token economy. The reason the…
The UK Jurisdiction Taskforce (“UKJT”) recently published a consultation paper on the status of cryptoassets, DLT, and smart contracts under English private law. The UKJT is one of the six taskforces of the LawTech Delivery Panel created by the Law Society of England and Wales. The LawTech Delivery Panel was set up in October 2018 and is formed of a team of industry experts and leading figures from government and the judiciary, aimed at helping the…
During a speech at Consenus 2019, Sigal Mandelker, the U.S. Treasury’s Under Secretary for Terrorism and Financial Intelligence, reiterated the projection that the Financial Action Task Force (“FATF”) will adopt international standards for cryptocurrency-based services in June 2019. FATF (also known by its French name, Groupe d’action financière) is an independent inter-governmental body that develops global standards for anti-money laundering and counter-terrorist financing. In 2014 and 2015 FATF began expressing concerns that the potential benefits…
On April 21, 2019, the English High Court ruled that it would have jurisdiction to hear the case of Ramona ANG v Reliantco Investments Ltd, following its determination that speculative investments, in this case Bitcoin futures, are not inherently a business activity. Therefore, the protections afforded to consumers under EU law (the Brussels Regulation (Recast) No 12/5/2012 (the “Regulation”) to bring claims via the courts in their own jurisdictions could apply to individual investors using…
On May 9, 2019, the U.S. Financial Crimes Enforcement Network (FinCEN) issued guidance on the application of Bank Secrecy Act (BSA) regulations, specifically those regulations applicable to money services businesses (MSBs), to certain business models involving the transmission of convertible virtual currencies (CVCs) (the “Guidance”). The Guidance follows previous interpretive guidance issued by FinCEN in 2013 relating to transactions involving the acceptance of currency or funds and the transmission of CVC. Also on May 9,…
We have previously written about New York’s BitLicense regulations, which prohibit companies from engaging in “virtual currency business activity” in New York, or with New York residents, without a license. Bittrex, based in the State of Washington, is one of the more established cryptocurrency exchanges. On April 10, 2019, the New York State Department of Financial Services (“DFS”) published a letter denying Bittrex’s BitLicense application. According to the DFS press release, the application was denied primarily…
In a first, on April 3, 2019, the US Securities and Exchange Commission issued its first cryptocurrency No-Action Letter. The Letter was issued to TurnKey Jet Inc. (“TKJ”), a jet-leasing business. The company will issue the TKJ digital tokens to people who sign up for its membership program and the members can then use the tokens to charter a private jet. Based on the Letter, TKJ may offer and sell its tokens without registration under…
Baker McKenzie is pleased to announce that the Blockchain and Cryptocurrency in Africa report is now available. This guide summarizes the latest and key developments taking place in 22 selected African jurisdictions in respect of blockchain and cryptocurrency, focusing on the regulatory approaches up until the end of 2018. This guide also provides a comparative assessment of the stance adopted by such regulators, with a view to providing a better understanding of the opportunities and challenges…