On April 7, 2022, the US Federal Deposit Insurance Corporation (FDIC) issued a Financial Institution Letter (āFILā) 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…
In a Statement published on March 23, 2022 (as translated using Google Translate), the Thai Securities and Exchange Commission announced that, starting April 1, 2022, digital assets (e.g., Bitcoin) will be banned as a method of payment. Business operators who find that customers are using digital assets to pay for goods or services must notify the user and take action against them, such as suspending or terminating their accounts. The Statement provided a number of…
An earlier post discussed that BitMEX, one of the worldās 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 ārejectedā the refund and argued that their lawsuit should continue. The IRS has now moved to dismiss the case. One…
In November 2021, Floki Inu, a cryptocurrency, ran an ad across the London Underground. The ad had an image of a cartoon dog wearing a Viking helmet. The text stated āMISSED DOGE. GET FLOKIā. Smaller text at the bottom of the ad said, āYour investment may go down as well as up in value. Crypto currency is not regulated in the UK.ā The U.K.’s Advertising Standards Authority (ASA) challenged the ad. Floki Inu explained that…
On January 20, 2022, the U.S. Federal Reserve issued its long-anticipated White Paper on the subject of central bank digital currency (CBDC). Not surprisingly, from the jump, the Fed made clear that this Paper was simply the starting point for opening a dialogue. The Fed said: The paper has been designed to foster a broad and transparent public dialogue about CBDCs in general, and about the potential benefits and risks of a U.S. CBDC. The…
On January 5, 2022, the United States Securities and Exchange Commission announced its first enforcement action of the year concerning a fraudulent initial coin offering. This is the latest in a long list of enforcement actions by the SEC targeting unregistered digital asset offerings. The SEC charged Australian citizen Craig Sproule and two companies he founded, Crowd Machine, Inc. and Metavine, Inc., with making materially false and misleading statements in connection with an unregistered offer…
In its first enforcement action in the cryptocurrency arena in 2022, on January 3, 2022, the United States Commodity Futures Trading Commission (CFTC) entered an Order filing and simultaneously settling charges against Delaware-registeredĀ Blockratize, Inc., which operated its business under the nameĀ Polymarket.Ā The Order finds that, beginning in approximately June 2020, Polymarket had been operating an illegal unregistered or non-designated facility for event-based binary options online trading contracts, known as āevent markets.ā According to the…
As we have discussed previously, although there was hope when Gary Gensler was initially appointed Chairman of the Securities Exchange Commission that this would mean the SEC would take a different, more enlightened view on the issue of approving a spot Bitcoin ETFs, over the past couple of months, that hope was dashed when Chairman Gensler noted that he looked favorably only on futures-based Bitcoin ETFs.Ā Consistent therewith, on October 19, 2021, Pro Shares became…
On November 1, 2021, the Presidentās Working Group on Financial Markets issued its long-awaited āReport on STABLECOINS.ā The Working Group is an inter-agency group made up of the Treasury Department, the Federal Reserve, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. The Federal Deposit Insurance Company and the Office of the Comptroller of the Currency contributed to the Report as well. A stablecoin is a digital currency that is pegged to a…