We previously reported that, in July 2019, the U.S. Internal Revenue Service announced that it had begun sending the now infamous letters to taxpayers who, supposedly, may have failed to properly report income and pay taxes associated with cryptocurrency transactions. About 10,000 of these Letter 6173 were sent. And we previously reported that James Harper had sued the IRS claiming the IRS violated his rights under the Fourth and Fifth Amendments of the U.S. Constitution…
The U.S. Securities and Exchange Commission announced on March 11, 2021 that it filed an emergency action and obtained a temporary restraining order and asset freeze against Shawn Cutting of Sandpoint, Idaho. According to the SEC’s complaint, from October 2017 through at least May 2020, Cutting raised at least $6.9 million from over 450 investors by representing that he would pool investor monies into a fund that invested in various digital assets. The complaint alleges…
For years, we have been writing about the reluctance of the U.S. Securities and Exchange Commission to approve a Bitcoin exchange-traded fund. See here and here. The stated concern of the SEC was whether the Bitcoin market was sufficiently resistant to market manipulation. However, as we recently reported, on February 12, 2021, Canada approved such an ETF. Indeed, it now has three: I Galaxy Bitcoin ETF (BTCX), Purpose Bitcoin ETF (BTCC), and the Evolve Bitcoin ETF (EBIT).…
In a previous post, we explained how the U.S. Internal Revenue Service had introduced a question on the 2020 tax form that asked whether “at any time during 2020 did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency.” The purpose of placing this question in a very prominent part of the tax form was to try to collect some of the significant amounts of the unreported taxes surrounding…
Before the current run-up in cryptocurrency prices, there were the wild days of late 2017 into 2018. One of the poster-children for that craze was an iced-tea company in Long Island, New York known as Long Island Iced Tea. From approximately 2015 to 2017, the company’s principal business was ready-to-drink beverages. In December 2017, the company changed its name to Long Blockchain Corp. (LBCC) and announced that it was shifting its business operations from soft…
On February 17, 2021, the U.S. Securities and Exchange Commission announced charges against Coinseed, a company that purported to offer a mobile investment application that enabled users to invest in digital assets, and its co-founder and Chief Executive Officer, Delgerdalai Davaasambuu, in connection with Coinseed’s offer and sale of digital asset securities. According to the SEC’s complaint, from at least December 2017 to May 2018, Coinseed and Davaasambuu sold digital asset securities called “CSD tokens”…
We previously reported that India’s Parliament was going to be considering legislation that would largely ban the use of private cryptocurrency. Bloomberg is now reporting that cryptocurrency investors in India will be given a transition period of three-to-six months after the implementation of the new law to liquidate their investments. While banning cryptocurrencies, the Indian government will allow the use of technology underlying the cryptocurrency for research. We also reported on the strict steps the…
Eight times since 2013, the U.S. Securities and Exchange Commission has repeatedly refused to approve applications for a cryptocurrency-linked exchange traded fund (ETF). See here and here. Time and again, the SEC said that the applicants were unable to persuade the Commission that the Bitcoin market was sufficiently resistant to market manipulation. Another common theme was the dissent of Hester Pierce (affectionately known as “Crypto Mom), who said in January 2020, for example: This order…
In a February 5, 2021 letter, the Central Bank of Nigeria (CBN) warned all banks in the country that that they are prohibited from dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges. Thus, all banks and other financial institutions were directed to identify persons transacting in or operating cryptocurrency exchanges and make sure that such accounts were closed. The letter included a warning that breaches of the directive would “attract severe regulatory sanctions.” After…
On January 29, 2021, Hugo Sergio Mejia, 49, of California, was charged in a two-count information with operating an unlicensed money transmitting business and money laundering. In a plea agreement, Mejia agreed to plead guilty to these felony offenses. According to his plea agreement, from May 2018 to September 2020, Mejia operated a virtual currency business that exchanged Bitcoin for cash, and vice versa, charging commissions for these transactions. Mejia admitted he never registered his…