Keyword: cryptocurrency

Just Another Week on the Blockchain: September 10-16, 2018

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The week of September 10th was particularly eventful and saw a rather large number of recent enforcement and regulatory developments, even by blockchain industry standards. Notable actions seen during the week included the first time the SEC has issued an order against a cryptocurrency company for operating an unregistered broker-dealer; the first time the SEC has brought and settled charges against a hedge fund manager that invested in cryptocurrencies while operating as an unregistered investment company; the first FINRA disciplinary action involving cryptocurrencies; a decision by EDNY Judge Raymond Dearie in U.S. v. Zaslavskiy; the authorization of two stablecoin cryptocurrencies pegged to the U.S. dollar by the New York Department of Financial Services; and the release of Chairman Clayton’s “Statement Regarding SEC Staff Views.”

For summaries of these developments, read our recent Blockchain and Cryptocurrency Alert.

Virtual Currencies Fall Within Scope of EU’s Fifth Anti-Money Laundering Directive

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The fifth iteration of the Anti-Money Laundering Directive (MLD5) took effect in July 2018. In addition to several updates covering a wide range of anti-money laundering objectives, MLD5 extends its coverage to include certain cryptocurrency service providers.

Learn more about the updates under MLD5, including further details regarding the inclusion of cryptocurrencies within the scope of EU anti-money laundering and terrorist financing regulations, in this recent alert.

SEC Finds Digital Tokens Issued in Exchange for Services Can Still Constitute Securities

In a recent settled enforcement action, In the Matter of Tomahawk Exploration LLC and David Thompson Laurance, the SEC found that the issuance of digital tokens in exchange for services, rather than money, can still constitute an offering of securities.

Learn what this decision might mean for the future of initial coin offerings from this recent Blockchain and Cryptocurrency Alert.

CFTC Chairman Includes Fintech and Virtual Currency in Agency’s Priorities

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On July 25th, 2018, CFTC Chairman Giancarlo addressed the House Committee on Agriculture regarding the agency’s priorities and recent work. A significant portion of his testimony focused on the CFTC’s oversight of fintech and cryptocurrencies.

Learn about the CFTC’s regulatory approach to cryptocurrency and distributed ledger technology in this recent derivatives post.

 

Cryptocurrencies and Online Promotions: Legitimate Activities or Fraudulent Schemes?

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The Internet is a double-edged sword, presenting business opportunities undreamed of 20 years ago – and the potential for fraudulent practices on a scale previously unimagined: Ponzi, pyramid and illegal “multi-level marketing” (MLM) schemes that use the reach of the Internet to victimize tens of thousands of people. Where do cryptocurrencies and efforts to market them fit into this mix of legitimate and fraudulent activities? Help comes to us from the FTC’s recent (January 2018) guidelines on the lawfulness of MLMs, which can be extrapolated to cryptocurrencies and their marketing.

Learn more from this recent IP Landscape post.

The NFA Enhances Reporting Requirements for Intermediaries Who Trade Virtual Currencies and Related Derivatives

Derivatives regulations have continued to evolve with the explosive growth of cryptocurrency in recent years. One of these earlier shifts transpired in late 2017, when the National Futures Association (NFA) issued three Notices to Members expanding the notifications and reporting requirements for financial derivatives intermediaries, citing similar actions by the CFTC along with the volatility in the underlying virtual currency markets.

Learn more about these regulatory shifts as well as perspectives on other derivatives regulators in this overview by our Securities Litigation team.