In an opinion issued on November 26, 2024, a unanimous three-judge panel of the United Staes Court of Appeals for the Fifth Circuit reversed a lower court’s decision and held that the United States Treasury Department did not have the right to sanction Tornado Cash because the statute that Treasury relied on authorized sanctions against “property” and Tornado Cash is not property. This blog post is a summary of the content of the court’s opinion.…
We have previously written about the recent decision that allowed a lawsuit to go forward against Shaquille O’Neal and others related to his role in the Astrals Project. Shaq and his son, Myles O’Neal, were founders of the Astrals Project. As alleged in the lawsuit, Astrals Project is a collection of 10,000 NFTs 3D avatars (designed by artist Damien Guimoneau), which Plaintiffs alleged was aimed to promote investment in a virtual world in which users…
There have been numerous lawsuits brought against the U.S. Securities and Exchange Commission (SEC) alleging that it has acted improperly and outside the law in regulating the crypto industry through enforcement actions and threats – rather than through regulation. See here (Consensys lawsuit) and here (Crypto.com lawsuit). On November 14, 2024, Attorneys General from 18 states brought their own lawsuit, naming as defendants the SEC, Chairman Gary Gensler, and each of the Commissioners (in their…
On January 10, 2024, after 10 years of saying “no,” the United States Securities and Exchange Commission (SEC) approved the application for eleven spot Bitcoin exchange-traded funds (ETFs). Within four months, Bitcoin hit record highs and more than $30 billion was invested in the Bitcoin ETFs. Then, on May 23, 2024, the SEC surprised the crypto community when it effectively approved the sale of spot Ether ETFs (see here). Those ETFs started trading in late July…
In 2021, we reported that the United States District Court for the District of New Hampshire dismissed a lawsuit that sought to block the United States Internal Revenue Service’s effort to obtain records from cryptocurrency exchanges that included account information about individual accounts. In a decision on September 24, 2024, the First Circuit Court of Appeals affirmed that dismissal. The case concerned a 2019 episode in which the IRS sent about 10,000 letters to taxpayers…
We previously reported on the pre-emptive lawsuit that Consensys Software Inc., a software developer whose business centers on the Ethereum blockchain network, brought against the United States Securities and Exchange Commission in April 2024 in federal court in Texas. The Complaint may be found here. Three of the four counts in the Complaint relate to Consensys’s ETH transactions (ETH is the native token for the Ethereum blockchain). The fourth count relates to Consensys’s two MetaMask software products:…
We recently reported about the decision by DraftKings to discontinue its NFT Marketplace business. At the time, DraftKings said the decision was due to “recent legal considerations.” 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 O’Neal 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. DraftKings explained that its decision was not made lightly but was due to “recent legal considerations.” 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…