The Texas State Securities Board issued a report summarizing its a four-week investigation of securities offerings tied to virtual currencies. They opened 32 investigations in the period commencing December 18, 2017. Among the findings: No promoters were registered to sell securities in Texas, a violation of the Texas Securities Act; 30 promoters were broadly using websites, social media, and onlineadvertising to market to Texans; Seven promoters were offering securities tied to a new cryptocurrency; At…
A class action lawsuit was brought today on behalf of investors in Nano f/k/a RaiBlocks (XRB), alleging, according to the plaintiffs’ lawyers, that Nano and key members of its core team violated federal securities laws and that, in their push to introduce XRB to a wide market of investors, recklessly directed investors to open accounts and place their assets with a little known, and severely troubled, Italian cryptocurrency exchange called BitGrail. On February 9, 2018,…
The U.S. Securities and Exchange Commission announced today that it charged two co-founders of a purported financial services start-up with orchestrating a fraudulent initial coin offering (ICO) that raised more than $32 million from thousands of investors last year. Criminal authorities separately charged and arrested both defendants. The SEC’s complaint alleges that Sohrab “Sam” Sharma and Robert Farkas, co-founders of Centra Tech., Inc., masterminded a fraudulent ICO in which Centra offered and sold unregistered investments…
The office of Massachusetts Secretary of State announced today that it had halted ICOs from five companies, claiming that the sale of digital tokens amounts to the unregistered offering of securities. Mattervest Inc, Pink Ribbon ICO, Across Platforms Inc, Sparkco Inc and 18 Moons were all ordered to stop sales of their coins. The firms, which were all either incorporated in Massachusetts or named the state as their principal place of business, were offering and…
Reuters reported that, starting tomorrow, Twitter will ban cryptocurrency ads. The prohibition will cover advertising of ICOS and ads by cryptocurrency exchanges and cryptocurrency wallet services, unless they are public companies listed on certain major stock markets. Facebook banned ads promoting cryptocurrencies in January. Earlier this month, Google announced that its ban of cryptocurrency-related content, including ICOs, wallets, and trading advice, would go into effect in June.
The global frenzy around cryptocurrencies has seen prices fluctuate dramatically over the past year, leading to a growing interest among Malaysian investors. The Central Bank of Malaysia (BNM) has repeatedly maintained its position that digital currencies are not legal tender in Malaysia, and has advised the public to be cautious of the risks that come with them. While there are no specific Malaysian regulations governing cryptocurrencies or their exchanges, the Malaysian Anti-Money Laundering, Anti-Terrorism Financing…
The Swiss Financial Market Supervisory Authority (FINMA) is one of the regulatory bodies that has taken specific steps with respect to ICOs. In its recently published booklet, Regulatory Aspects of ICOs in Switzerland, Baker McKenzie’s Zurich office gives an overview of the regulation of ICOs in Switzerland.
Initial Coin Offerings are now mushrooming in Germany as well. Besides the recent Savedroid ICO, the local Frankfurt news section of the Frankfurter Allgemeine Zeitung recently mentioned at least three more transactions that are in the process of being launched. Like its many European counterparts, the German regulator BaFin is very skeptical regarding blockchain-based coin (“token”) sales and has issued a number of warnings to consumers. More recently, on 20 February 2018, the BaFin published…
When traders want to purchase crypto using traditional currency, or exchange one cryptocurrency for another, they do so via an exchange. Coinbase is one of the world’s largest, with over 13 million users. Over the past few days it has been hit with two class action lawsuits, both in federal district court in California. The first an insider trading case. The suit claims Coinbase employees unfairly profited from the December listing of bitcoin cash. The…
The U.S. SEC, in recent months, repeatedly put cryptocurrency companies and their advisers on notice about what officials said were violations of securities rules designed to protect investors. see posts of 1-3; 1-23; 2-6. And SEC chairman Clayton said he had instructed his staff to be on high alert for approaches to ICOs that may be contrary to the spirit of those laws. According to a Wall Street Journal report, those warnings have now been…