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Cryptocurrency

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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…

In 2018, the Marshall Islands passed a Sovereign Currency Act, declaring its intention to release a new, national digital currency.  In an essay published by Coindesk on September 4, The Honorable David Paul, Minister In-Assistance to the President and Environment of the Marshall Islands, stated that the official launch of the cryptocurrency – to be known as the sovereign (SOV) coin — will be announce at Invest:Asia 2019, upcoming in Singapore on September 12.  Currently,…

In July, the IRS announced that it had begun sending letters to taxpayers who may have failed to properly report income and pay any tax associated with cryptocurrency transactions or who did not properly report such transactions. The IRS expects to send more than 10,000 letters before the end of August. Taxpayers who have not properly reported their cryptocurrency transactions are, where appropriate, liable for tax, penalties, and interest, and in certain cases, may be…

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…