We recently reported about the decision by DraftKings to discontinue its NFT Marketplace business. At the time, DraftKings said the decision was due to ārecent legal considerations.ā Although DraftKings did not elaborate, conventional wisdom was that this was a reference to a decision in July, in federal district court in Massachusetts in Dufoe v. DraftKings, that refused to dismiss a proposed class action suit against DraftKings claiming that the NFTs that DraftKings sold on its…
Since the 1970s, the US has required certain banks and other financial institutions to report cash transactions of more than $10,000 under the Bank Secrecy Act (contained in Title 31 of the United States Code). In 1984, Congress enacted Section 6050I of the US Internal Revenue Code (contained in Title 26) to require reporting by any taxpayer who, in the course of a trade or business, receives more than $10,000 in cash in one or…
On August 16, 2024, a federal district court judge in Florida denied in large part the motion to dismiss brought by basketball legend Shaquille OāNeal in the case in which he was sued for his role in Astrals Project, concerning NFTs. An NFT (non-fungible token) can be thought of as a unique cryptographic key contained within a digital token on the blockchain that verifies the corresponding content file as genuine. It is most often used…
In an Announcement on July 30, 2024, DraftKings said that it had decided to discontinue its NFT Marketplace.Ā DraftKings explained that its decision was not made lightly but was due to ārecent legal considerations.āĀ Although DraftKings did not elaborate any further on those considerations, last month, a judge in federal district court in Massachusetts refused to dismiss a proposed class action suit against DraftKings claiming that the NFTs that DraftKings sold on its Marketplace were…
We recently reported about the pre-emptive lawsuit thatĀ Consensys Software Inc., brought against theĀ United States Securities and Exchange Commission over the regulation of Ethereum.Ā We also previously reported on the SECās first NFT enforcement action, against Impact Theory, LLC, a media and entertainment company. The SECās second NFT enforcement action, against Stoner Cats, was brought a few weeks later, in September 2023.Ā These two actions by the SEC were a big part of the impetus behind…
In a post two months ago, we discussed how the United States Securities and Exchange Commission surprised the crypto community on May 23, 2024 when it effectively set the stage for the sale of spot Ethereum Exchange-Traded Funds (ETFs) to begin in the not-too-distant future. That day has now arrived. On May 23, 2024, the SEC approved the 19b-4 form for a number of ETH ETF applications (form 19b-4 is a form that is used to inform…
We previously reported about action by the U.S. House of Representatives concerning U.S. Security and Exchange Commission (āSECā) Staff Accounting Bulletin No. 121 (āSAB 121ā), which was issued on March 31, 2022. It requires reporting entities which perform custodial duties in relation to crypto assets to hold those assets on their balance sheet. Doing so means these entities would also be required to take on significant capital, liquidity, and other costs under the existing prudential regulatory…
In the United States, the Form 1099 has been used for years by investment firms to report investment income of their customers. As a result of final regulations (the āFinal Regulationsā) that the United States Internal Revenue Service issued on June 28, 2024, there will now be a Form 1099-DA (not yet released) on which custodial brokers will be required to report sales and exchanges of digital assets, including cryptocurrency. The reporting requirement will go…
In two earlier posts, we reported about Consensys filing a pre-emptive lawsuit against the United States Securities and Exchange Commission seeking, among other things, a declaration that (i) Ether is not a security and that, accordingly, the SECās investigation into Ether and Ethereum and any resulting enforcement actions exceed its regulatory authority; (ii) any enforcement action against Consensys premised on Ether being a security or Ether transactions being securities transactions would violate due process and…
Dapper Labs is the company that was known originally for CryproKitties. That ran on the Ethereum blockchain. But Dapper Labs then developed its own blockchain, called Flow, to house NBA Top Shot, its co-venture with the NBA. Top Shot is best known for selling āMoments,ā which are often compared to sports trading cards. Dapper Labs clips NBA highlights and turns them into NFTs (non-fungible tokens), which can be bought and sold. In May 2021, a…