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On June 4, 2018, the U.S. SEC named Valerie A. Szczepanik as its first ever Crypto Czar.  According to the press release, in this newly created advisory position, Ms. Szczepanik will coordinate efforts across all SEC Divisions and Offices regarding the application of U.S. securities laws to emerging digital asset technologies and innovations, including ICOs and cryptocurrencies.

In an earlier post, we reported on the North American Securities Administrators Association (NASAA)’s Operation Cryptosweep, coordinated series of enforcement actions by state regulators to crack down on fraudulent cryptocurrency-related investment schemes.  Under that operation, the Vermont Department of Financial Regulation issued, on June 4, a cease and desist order to LevelNet, of Irving, California, for violations related to the Vermont Uniform Securities Act. According to the department, LevelNet is conducting an ICO seeking to…

On May 29 the Securities and Exchange Commission (“SEC”) announced it had obtained a court order halting the ICO of BAR, a coin developed by Michael Stollery, commonly known as Michael Stollaire, and his firm Titanium Blockchain Infrastructure Services.  The SEC also obtained an order approving an emergency asset freeze and the appointment of a receiver for Titanium Blockchain. In its complaint, the SEC alleged that Stollaire lied about business relationships with the Federal Reserve…

In a press release issued on May 21, The North American Securities Administrators Association (NASAA)t announced one of the largest coordinated series of enforcement actions by state and provincial securities regulators in the United States and Canada to crack down on fraudulent ICOs, cryptocurrency-related investment products, and those behind them. NASAA members from more than 40 jurisdictions throughout North America participated in “Operation Cryptosweep,” which to date has resulted in nearly 70 inquiries and investigations…

As a way of educating the public, the SEC launched a website that offers a mock ICO.  It did so in the hopes of showing how easily people can be scammed.  Howey Coins (named, tongue-in-cheek for the Howey test used by the Supreme Court to determine whether an investment is a security) claimed to have a two-month return of over 72%, as well as celebrity testimonials.  Those who clicked on “Buy Coins Now” link were…

SEC-watchers regularly quote Chairman Clayton’s statement at a February 2018 Senate hearing (“I believe every ICO I’ve seen is a security”) as evidence of the SEC’s strict view of ICOs.  During a speech yesterday at the Medici Conference, SEC Commissioner Hester Pierce took a different tact.  Asking, rhetorically, whether ICOs offerings are securities that have to be registered or qualify for an exemption, she said that the answer should be rooted in the well-know Howey…

Defendants in this case created a cryptocurrency called Alibabacoin and used the Alibaba name on its alibabacoinwallet.com websites, Facebook page, and phone applications.  Online retailer Alibaba sued for infringement of its federally registered “Alibaba” mark.  Despite finding it that there was subject matter jurisdiction under the Lanham Act (the US federal trademark statute), the court denied Alibaba’s motion for a preliminary injunction without prejudice to renewal upon a showing of personal jurisdiction.  The court held…

In January, the New York Stock Exchange asked the Securities and Exchange Commission to allow it to list five bitcoin-related exchange-traded funds (ETFs) on one of its markets, according to an SEC filing.  Last week, the SEC issued an order indicating that it was going to take additional time to consider the application.  The SEC is soliciting written comments from the public to address 13 questions, including commenters’ views on whether the proposed funds would…

The U.S. SEC’s continued effort to try to walk a tightrope regarding regulation of ICO’s was on display again yesterday.  Chairman Clayton has famously said that “I have yet to see an ICO that doesn’t have a sufficient number of hallmarks of a security.”  Yet, during testimony yesterday,  William Hinman, the director of the SEC’s Division of Corporation Finance, stated his division is “striving for a balanced approach,” and repeated the oft-voice concern that they…

The U.S. Commodity Futures Trading Commission (CFTC) announced the filing of a Complaint in the U.S. District Court for the Eastern District of New York charging Defendants Blake Harrison Kantor, who frequently uses the alias Bill Gordon, and Nathan Mullins, and the entities Blue Bit Banc, Blue Bit Analytics, Ltd. with operating a  fraudulent scheme involving binary options and a virtual currency known as ATM Coin.  The district court, on April 17, 2018, entered a…