The ruling that the SEC acted arbitrarily in denying Coinbase's crypto rulemaking petition, issued in the waning days of the Gensler-era SEC, invites swift action under an Atkins-led SEC....more
Two SEC commissioners dissented and urged the Commission to provide further guidance on non-fungible tokens ("NFTs")....more
9/7/2023
/ Cryptoassets ,
Cryptocurrency ,
Digital Assets ,
Enforcement Actions ,
Howey ,
Investment Contract ,
Investment Opportunities ,
Non-Fungible Tokens (NFTs) ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Securities Transactions ,
Securities Violations ,
Unregistered Securities
In Short -
The Situation: Recently, two judges in Southern District of New York were required to apply the Howey test in separate cases to decide whether sales of certain crypto assets were investment contracts, and thus...more
8/22/2023
/ Administrative Procedure Act ,
Cryptoassets ,
Cryptocurrency ,
Digital Assets ,
Due Process ,
Enforcement Actions ,
Howey ,
Investment Contract ,
Investment Opportunities ,
Popular ,
Ripple ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Stablecoins
In Short -
The Situation: In parallel federal actions, the Department of Justice ("DOJ"), Securities and Exchange Commission ("SEC"), Commodity Futures Trading Commission ("CFTC"), and Federal Trade Commission ("FTC")...more
7/24/2023
/ CFTC ,
Cryptoassets ,
Cryptocurrency ,
Decentralized Finance (DeFi) ,
Department of Justice (DOJ) ,
Digital Assets ,
Enforcement Actions ,
Federal Trade Commission (FTC) ,
FTC Act ,
Market Manipulation ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
In Short -
The Situation: Decentralized finance ("DeFi") is a rapidly growing sector that, by definition, eschews centralized financial institutions altogether. Misconduct that has accompanied that growth has drawn the...more
In two first-of-their-kind enforcement actions relating to NFTs, securities regulators in Texas and Alabama ordered a Cyprus-based online casino developer and its founders to cease and desist selling NFTs that allegedly were...more
The SEC's Enforcement Action Against Ripple -
In December 2020, the SEC commenced an enforcement action against Ripple and two of its senior executives alleging that the defendants violated Section 5 of the Securities Act...more
4/1/2022
/ Aiding and Abetting ,
Digital Assets ,
Enforcement Actions ,
Extraterritoriality Rules ,
Fair-Notice Standard ,
Financial Markets ,
Investment ,
Ripple ,
Section 5 ,
Securities Act of 1933 ,
Securities Litigation ,
Securities Transactions ,
Securities Violations ,
Unregistered Securities
The SEC's Enforcement Action Against Ripple -
In December 2020, the SEC commenced an enforcement action against Ripple and two of its senior executives alleging that the defendants violated Section 5 of the Securities Act of...more
3/23/2022
/ Aiding and Abetting ,
Digital Assets ,
Enforcement Actions ,
Fair-Notice Standard ,
Financial Services Industry ,
Investment ,
Motion to Dismiss ,
Motion To Strike ,
Popular ,
Section 5 ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Transactions ,
Securities Violations ,
Unregistered Securities
On October 18, 2021, New York Attorney General Letitia James directed two virtual currency lending platforms to immediately cease their unregistered and allegedly unlawful activities in New York and sent letters to three...more
10/29/2021
/ Cryptocurrency ,
Decentralized Finance (DeFi) ,
Enforcement Actions ,
Financial Markets ,
Financial Services Industry ,
Lenders ,
New York ,
Regulatory Violations ,
Securities Transactions ,
Stablecoins ,
State Attorneys General ,
Virtual Currency
SEC Chairman Gary Gensler has left little doubt that his commission will closely monitor activity in the cryptoasset markets and the actions of decentralized finance, or DeFi platforms, as investor interest continues to grow....more
CFTC Commissioner asserts that Decentralized Finance ("DeFi") likely violates the Commodity Exchange Act ("CEA") and that the regulator should respond accordingly.
DeFi is an umbrella term encompassing a range of...more
On February 26, 2021, the SEC's Division of Examinations released a Risk Alert to make digital asset market participants aware of recurring issues that have arisen in the course of recent examinations, and provide notice of...more
The Situation: As the U.S. Securities and Exchange Commission ("SEC") continues to bring enforcement actions to stop unregistered sales of digital tokens, blockchain companies are exploring ways to sell tokens to the public...more
The Situation: The Financial Crimes Enforcement Network ("FinCEN") released interpretive guidance concerning the application of the Bank Secrecy Act ("BSA") and the anti-money laundering ("AML") regulations to certain...more
6/21/2019
/ Anti-Money Laundering ,
Bank Secrecy Act ,
Blockchain ,
Civil Monetary Penalty ,
Convertible Virtual Currencies (CVCs) ,
Distributed Ledger Technology (DLT) ,
Enforcement Actions ,
FinCEN ,
Initial Coin Offering (ICOs) ,
Money Services Business ,
p2p ,
Peer-to-Peer ,
Regulatory Requirements ,
Suspicious Activity Reports (SARs) ,
Virtual Currency
The Situation: The U.S. Securities and Exchange Commission ("SEC") issued a framework for market participants in assessing whether their digital assets-related activities involve the offer, sale, or distribution of investment...more
4/8/2019
/ Blockchain ,
Digital Assets ,
Enforcement Actions ,
Howey ,
Investment Contract ,
Investment Funds ,
No-Action Letters ,
No-Action Relief ,
Regulatory Oversight ,
Securities and Exchange Commission (SEC) ,
Token Sales ,
Tokenization
The Situation: Federal prosecutors have asserted that two cryptocurrencies sold in initial coin offerings ("ICOs") are "securities" for purposes of federal securities laws in a criminal indictment alleging fraud against the...more
9/24/2018
/ Criminal Prosecution ,
Cryptocurrency ,
Enforcement Actions ,
Howey ,
Indictments ,
Initial Coin Offering (ICOs) ,
Investment Contract ,
Material Misrepresentation ,
Real Estate Investments ,
Securities Act of 1933 ,
Securities Exchange Act ,
Securities Fraud ,
Subject Matter Jurisdiction ,
Token Sales
The surge in cryptocurrency activity has led to an increase in attention from enforcement authorities at both the state and national levels. The Texas State Securities Board launched an investigation into cryptocurrency...more
5/15/2018
/ Bitcoin ,
Broker-Dealer ,
Cease and Desist Orders ,
Cryptocurrency ,
Digital Currency ,
Disclosure Requirements ,
Enforcement Actions ,
Foreign Securities ,
Initial Coin Offering (ICOs) ,
Registration Requirement ,
Securities Violations ,
State Securities Regulators ,
Token Sales ,
Unregistered Securities
The Situation: The U.S. Securities and Exchange Commission has launched a special unit to bring enforcement actions against several forms of cyber misconduct.
The Result: The Cyber Unit has already brought enforcement...more
12/20/2017
/ Blockchain ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Enforcement Actions ,
Ethereum ,
Initial Coin Offering (ICOs) ,
Popular ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Token Sales ,
Unregistered Securities ,
Virtual Currency
The Situation: Promoters of two recent initial coin offerings face charges of investor fraud brought by the SEC, after allegedly misrepresenting the assets purportedly backing the offerings, exaggerating the amount of funds...more
10/11/2017
/ Asset Freeze ,
Digital Currency ,
Enforcement Actions ,
Initial Coin Offering (ICOs) ,
Investment Fraud ,
Investors ,
Misrepresentation ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Token Sales ,
Unregistered Securities ,
Virtual Currency