On 3 January, 2020, Tang Sisi, the Vice-Chair of the Smart City Development Research Centre at China’s State Information Centre (CSIC) announced that a Blockchain Service Network (BSN) will launch for commercial purposes in April 2020. What is the BSN? The BSN is a state-backed national blockchain service infrastructure platform that spans public networks, regions and institutions. It was planned by CSIC and independently developed by China UnionPay, China Mobile and others. The BSN has…
We have previously reported on the SEC’s case against Longfin Corp and its founding CEO and controlling shareholder, Venkata Meenavalli. The SEC’s complaint alleged that Longfin and Meenavalli obtained qualification for a Regulation A+ offering by falsely representing in public filings that the company was managed and operated in the U.S. According to the complaint, Longfin and Meenavalli then distributed over 400,000 Longfin shares to Meenavalli’s affiliates, and misrepresented the offering to Nasdaq in order to meet…
On October 9, 2019, the U.S. tax authority (the Internal Revenue Service or “IRS”) released Revenue Ruling 2019-24 providing guidance on the U.S. income tax treatment of hard forks and airdrops of cryptocurrency (see our prior post about this guidance). On December 20, 2019, eight members of the U.S. Congress sent a letter to the Commissioner of the IRS stating that they were “concerned that this recent guidance raises many new questions related to the…
Effective as of December 27, 2019, the Bahamas went live with its central bank digital currency (“CBDC” ) platform, known as the Sand Dollar. It will undergo a pilot phase testing in Exuma, which will be extended in the first half of 2020 to Abaco. According to the outline published by the Central Bank of the Bahamas, the Sand Dollar is a digital fiat currency, not a cryptocurrency: A digital fiat currency would not be…
In a letter published in November 2019, Sanjay Dhotre, India’s Minister of State for Electronics and Information Technology (MeitY) , stated that the Indian government is developing a National Level Blockchain Framework and is currently preparing an approach paper. The letter arose in response to a number of questions from MP Parvesh Sahib Singh Verma on what steps the government had taken to promote and encourage the use of blockchain technology and whether it had…
Historically, U.S. tax law has allowed a taxpayer to exchange one investment property for another and defer the income tax consequences of that exchange so long as both the relinquished property and the acquired property are sufficiently similar—along with several other requirements. This type of tax-deferred exchange is referred to as a Like-Kind or Section 1031 Exchange. Without this Like-Kind Exchange treatment, a taxpayer would owe income tax on the increase in value of the…
The UK tax authority, HM Revenue & Customs (“HMRC”), published, on November 1, 2019 guidance for companies and businesses on how tax transactions involving cryptoasset exchange tokens (such as Bitcoin) will be taxed. This covers liability to corporation tax, capital gains tax, employment taxes, VAT and stamp duties. Much will depend on whether or not the activity involving exchange tokens amounts to trading or not. Following are the key points for businesses. Cryptoassets are not…
A number of recent developments in Ukraine have demonstrated the country’s focus on promoting a blockchain friendly ecosystem. At a government level, the recently established Ministry of Digital Transformation (MDT) (available in Ukrainian only) is actively promoting a friendly regulatory environment for blockchain/cryptocurrency projects in Ukraine, in both the public and private sectors. To further this aim, the MDT has kicked off various initiatives in order to promote blockchain, including recently hosting a meeting (available…
On August 20, 2019, the Swiss Banking Association (“SBA”) released guidelines for member banks (in German with Italian, French and English versions to follow) about opening company accounts for companies with a nexus to distributed ledger technology (“DLT”). These guidelines update the SBA’s guidelines from September 21, 2018. The guidelines outline what banks should require of DLT-nexus companies in the account opening process to address risk management related to issues such as anti-money laundering (“AML”).…
The Bank of The Republic of Burundi issued a statement in which it banned the use of cryptocurrencies in the country. The Statement said, “Since virtual currencies or cryptocurrencies are not regulated and are not issued or guaranteed by any Government or Central Bank, these currencies do not have legal tender in the territory of Burundi.” The measure was justified as a consumer protection measure: “virtual currencies are traded on unregulated online platforms around the…