We have reported in this space about how the SEC has indicated that most ICOs probably qualify as securities under U.S. law. see 1-3 and 1-23. One of the SEC’s first enforcement actions in this regard was against Maksim Zaslavskiy for his two initial coin offerings allegedly marketed through his companies REcoin and Diamond Reserve Club. That was followed by a criminal suit. Yesterday, Zaslavskiy sought to dismiss the criminal case, arguing that the cryptocurrencies…
The U.S. Securities and Exchange Commission today charged a former bitcoin-denominated platform and its operator with operating an unregistered securities exchange and defrauding users of that exchange. The SEC also charged the operator with making false and misleading statements in connection with an unregistered offering of securities. The SEC alleges that BitFunder and its founder Jon E. Montroll operated BitFunder as an unregistered online securities exchange and defrauded exchange users by misappropriating their bitcoins and…
In an effort to create clarity for market participants, the Swiss Financial Market Supervisory Authority FINMA published guidelines, on Friday, February 16, that set out how it intends to apply financial market legislation in handling inquiries from ICO organizers. The guidelines also define the information FINMA will require to deal with such inquiries and the principles upon which it will base its responses. Focusing on anti-money laundering and securities regulation, FINMA plans to handle ICO…
We previously reported on the Kentucky court that issued a temporary restraining order against BitConnect. On Wednesday, that TRO was extended to February 27. Yesterday, a new lawsuit was brought against BitConnect in federal court in Florida. The judge in this case refused to enter a TRO freezing the defendants’ assets. Following are the material parts of the decision: Plaintiffs argue that without the TRO, Defendants may “dissipate money generated from Plaintiffs and the Class or…
The U.S. SEC announced today that it had obtained a court order to halt and freeze the assets of what is likely one of the largest initial coin offerings ever. The complaint alleges that AriseBank used social media, a celebrity endorsement, and other wide dissemination tactics to raise what it claims to be $600 million of its $1 billion goal in just two months. According to the SEC press release, “AriseBank and its principals sought…
We previously reported how, in the Tezos litigation, the court denied a temporary restraining order that sought to enjoin the defendants from selling, transferring, converting, or otherwise disposing of any assets collected or derived from an ICO, holding that plaintiff had failed to show that he is likely to suffer irreparable harm in the absence of injunctive relief. Today, in connection with the class action against BitConnect, (Paige v Bitconnect, case 3:18-cv-0058-JHM W.D. Ky 1-30-18),…
At a blockchain conference in Thailand, a Chinese official indicated that that the blanket ban on ICOs in China might be relaxed in 2018 in favor of other types of regulation.
In a speech at the Securities Regulation Institute yesterday, U.S. SEC Chairman Clayton delivered some pretty blunt (and, according to the Commissioner, “stern”) words to lawyers and other professionals. He said that market professionals need to act responsibly and hold themselves to a higher standard; in the realm of ICOs, he said, “they can do better.” Talking specifically about lawyers, he commented: First, and most disturbing to me, there are ICOs where the lawyers involved…
The International Organization of Securities Commissions (IOSCO) describes itself as the leading international policy forum for securities regulators, as being recognized as the global standard setter for securities regulation and as having a membership that regulates more than 95% of the world’s securities markets in more than 115 jurisdictions. It issued a media release today in which it warned that ICOs are highly speculative investments in which investors are putting their entire invested capital at…
Today, the Securities Commission Malaysia (SC) directed CopyCash Foundation to immediately cease and desist all its proposed activities, including a purported plan to launch an ICO on January 10, 2018 in Malaysia. This directive covers all activities as described in or incidental to CopyCash Foundation’s white paper related to the ICO, including any roadshows, seminars or promotional events related to the scheme. The directive was issued because the SC “found that there is a reasonable…