Earlier this month, the United States Department of Justice (DOJ) announced charges against six individuals, in four separate cases, involved in fraudulent crypto related schemes and thereby further highlighted its commitment to protecting investors and consumers. The schemes involved the following alleged fraudulent acts; NFT Fraud (United States v. Le Ahn Tuan): A Vietnamese national and co-conspirators created an NFT called “Baller Ape” and shortly after the first day of trading, engaged in what is…
We have followed for years the saga of the many applications for a spot Bitcoin ETF that have been denied by the U.S. Securities and Exchange Commission (SEC). See here and here. This included the hope, when current SEC Chairman Gary Gensler was originally appointed, that the SEC might view things differently, but it was not meant to be, as the string of denials continued. There was one bright spot, in October 2021, when the…
Washington based think tank Coin Center has brought a lawsuit against, among others, the United Sates Treasury Department and Internal Revenue Service regarding a reporting requirement included in last yearâs major infrastructure legislation. We wrote at that time about the criticism of the bill with respect to the reporting burdens that were going to be placed on âbrokersâ of âdigital assetâ transfers. The Coin Center lawsuit focuses on the so-called Section 6050I reporting requirement, which…
Last month we wrote about the U.S. Department of Commerce entering the cryptocurrency fray by publishing in the Federal Register a Request for Comments (RFC) under the title âDeveloping a Framework on Competitiveness of Digital Asset Technologies.â The impetus for the publication was President Bidenâs March 9, 2022 Executive Order — âEnsuring Responsible Development of Digital Assetsâ — which the White House described as the first ever, whole-of-government approach to addressing the risks and harnessing…
We have written often about the efforts of the United States Securities and Exchange Commission (here and here) and Commodity Futures Trading Commission (here and here) to regulate in the cryptocurrency space. On May 19, 2022, the U.S. Department of Commerce entered the fray by publishing in the Federal Register a Request for Comments (RFC) under the title âDeveloping a Framework on Competitiveness of Digital Asset Technologies.â The impetus for the publication was President Bidenâs…
BitMEX is one of the worldâs largest cryptocurrency trading platforms. Last year, the U.S. District Court for the Southern District of New York entered a Consent Order that the U.S. Commodities Futures and Trading Commission agreed to with five companies charged with operating BitMEX. The order required the BitMEX entities to pay a $100 million civil monetary penalty. (read more here). Earlier this year, the three co-founders of the company plead guilty to violating the Bank Secrecy Act…
For those who have followed for some time the law that has developed around blockchain, there is a strong likelihood they associate the term DAO (decentralized autonomous organization) with the well-publicized hack that took place in 2016 with respect to one of the relatively early ICOs (initial coin offering) of an organization called Slock.it UG. The objective of that DAO — referred to as The DAO — was to operate a for-profit entity that would…
On April 7, 2022, the US Federal Deposit Insurance Corporation (FDIC) issued a Financial Institution Letter (âFILâ) requiring that all FDIC-supervised institutions that intend to engage in, or that are engaged in, any activities involving or related to crypto assets notify the FDIC. Because the overwhelming majority of U.S. banks are insured by the FDIC, the FIL means that nearly all banks must now disclose their crypto activities to the FDIC. The definition of crypto…
An earlier post discussed that BitMEX, one of the worldâs largest cryptocurrency trading platforms, entered a Consent Order with the U.S Commodities Futures and Trading Commission under which it agreed to pay a $100 million civil monetary penalty. Subsequently, in February 2022, two BitMEX co-founders, Arthur Hayes and Benjamin Delo, pled guilty to violating the BSA in February 2022. On March 9, 2022, the third co-founder, Samuel Reed, pled guilty to violating the Bank Secrecy…
We previously reported about a case in which a Tennessee couple, the Jarretts, sued the U.S. Internal Revenue Service seeking a refund for taxes they paid on Tezos tokens that they earned through staking. On February 14, 2022, the IRS delivered the requested refund with interest, thinking that would end the lawsuit. But the Jarretts ârejectedâ the refund and argued that their lawsuit should continue. The IRS has now moved to dismiss the case. One…