cryptocurrency law

POLKADOT IS NOT A SECURITY

There are endless debates currently about which tokens are in fact ‘securities’ and therefore subject to SEC oversight. The SEC presently deems all token/coins besides Bitcoin as securities; though the status of Ethereum is uncertain, it likely leans towards not…

SEC V. LBRY INC., ANALYSIS

The summary judgment in favor of the SEC was issued on November 7, 2022 and the only issues addressed were whether LBRY did offer its LBC token in violation of securities laws (as an unregistered security without asserting any exemption…

PROPOSED CRYPTO REGULATION CLASSIFIES CRYPTO-ASSETS AS COMMODITIES

A Senator from NY and a Senator from WY have recently presented Congress with a draft proposal for a crypto regulatory scheme which is a mixed bag from this Firm’s perspective. Wyoming is possibly the best state for crypto ventures and banking, and for good reason, hence one of the senators (Lummis) has been and remains definitively pro-crypto. Nonetheless the bill could have been much better. Firstly, crypto-assets would, for the most part, be under the regulatory imprimatur of the Commodities and Futures Trade Commission; as mentioned in other posts, this is a positive development as crypto-assets are, for the part closest in their nature to commodities and should reasonably be under the CFTC’s control. The SEC has done a decent job of bringing enforcement actions against some of the largest fraudulent players, rug pulls, and pyramid schemes, to date, numbering about 80; though this is just a tiny part of the total fraudulent activity in this market. The SEC is not the proper agency to regulate crypto and forcefully shove some crypto assets under the ‘securities’ definition, when such an interpretation is unwarranted. CFTC may be a smaller and lesser funded agency, but congress can certainly provide additional funding or mandate that its expansion into crypto regulation be funded by various crypto industry actors. It appears the SEC will share some regulatory control with the CFTC over crypto-assets when it is clear that a particular digital asset is acting as a security; this is totally reasonable, as digital assets such as crypto token, coins, and NFTs can act as commodities and securities, though the top 10-20 crypto-assets are almost certainly more akin to commodities. Crypto transactions below $200 will be exempt from tax reporting/payment obligations. This is a start; however, this amount is far too low. $1k would be […]

ARE NFTs SECURITIES?

Unfortunately there is no clear answer to this question at this time due to a lack of regulatory guidance and no such guidance forthcoming in the near future due to the slow movement of and disputed control over NFTs by…

STATE REGULATORY ACTION AGAINST BLOCKFI

Recently a ‘Cease and Desist Order’ was issued against BlockFi by the securities bureau of New Jersey prohibiting any further business activity in that state for the illegal sale of unregistered securities which included its high interest paying crypto savings…

NEW BANK SECRECY ACT CRYPTO GUIDANCE FROM US REGULATORS

The Securities & Exchange Commission (SEC), Financial Crimes Enforcement Network (FinCEN) and Commodity Futures Trading Commission (CFTC) have issued a joint statement that reminds certain parties of their continuing obligations under the Bank Secrecy Act (BSA) with respect to crypto…