On March 31, 2022, the staff of the Division of Corporation Finance and the Office of the Chief Accountant of the SEC issued Staff Accounting Bulletin No. 121 (SAB 121), which “adds interpretive guidance for entities to consider when they have obligations to safeguard crypto-assets held for their platform users.” SAB 121 highlights the enhanced technological, legal and regulatory risks associated with safeguarding digital assets, as compared with more traditional asset classes.
Continue Reading SEC Issues SAB 121 Providing Accounting Guidance for Companies that Safeguard Digital Assets
SEC Determines Digital Asset, VCOIN, Not a Security
On November 19, 2020, IMVU, Inc. received no-action relief from the Securities and Exchange Commission confirming that the Division of Corporate Finance will not recommend enforcement action against IMVU for selling its digital asset, VCOIN.
Continue Reading SEC Determines Digital Asset, VCOIN, Not a Security
SEC and CFTC Charge a Bitcoin-Funded International Securities Dealer
On September 27, 2018, the Securities Exchange Commission (“SEC”) and Commodity Futures Trading Commission (“CFTC”) charged an international securities dealer with illegally offering and selling to U.S. investors security-based swaps funded with bitcoins and related violations of the Commodities Exchange Act. The broker, 1pool Ltd., a.k.a. 1Broker, and its CEO, Patrick Brunner, were both named in the complaint filed by the SEC with the U.S. District Court for the District of Columbia.
Continue Reading SEC and CFTC Charge a Bitcoin-Funded International Securities Dealer
SEC Acts Over Weekend to Suspend Trading in Certain Crypto Stocks
On September 9, 2018, the SEC announced the temporary trading suspension of two securities, known as Bitcoin Tracker One and Ether Tracker One, in light of apparent confusion among market participants regarding the characteristics of these instruments.
Continue Reading SEC Acts Over Weekend to Suspend Trading in Certain Crypto Stocks
NASAA Updates Status of “Operation Cryptosweep”
On August 28, 2018, the North American Securities Administrators Association published a press release with an update on the progress of the coordinated enforcement sweep of the ICO market dubbed “Operation Cryptosweep.”
Continue Reading NASAA Updates Status of “Operation Cryptosweep”
SEC Brings Enforcement Case Involving “Airdrop” of Securities
A recent settled SEC enforcement action against an ICO issuer and its promoter calls into question the viability of the “airdrop” model of distributing digital tokens to investors. Whether such a distribution model runs afoul of the federal securities laws has been the subject of much debate in recent months, and the SEC’s case provides additional insight into their analysis of the issue.
Continue Reading SEC Brings Enforcement Case Involving “Airdrop” of Securities
World Bank Offers Blockchain Bond
On August 9, 2018, the World Bank issued a press release highlighting what it described as the “World’s First Blockchain Bond.”
Continue Reading World Bank Offers Blockchain Bond
FTC to Commence Hearings on Competition and Consumer Protection in the 21st Century
On August 6, 2018, the FTC published a notice seeking public comment as to whether broad-based changes in the economy, evolving business practices, new technologies or international developments might require adjustments to competition and consumer protection law, enforcement priorities and policy. The topics that the FTC seeks comments on could easily accommodate market developments due to the emergence of blockchain technology and related applications.
Continue Reading FTC to Commence Hearings on Competition and Consumer Protection in the 21st Century
Switzerland Announces ICO Enforcement Action
In a terse press release issued July 26, 2018, the Swiss Financial Market Supervisory Authority (“FINMA”) announced that it has launched enforcement proceedings against an ICO issuer based on evidence that the company may have “breached financial market law.” According to FINMA, the proceedings focus in particular on possible breaches of Swiss banking law resulting from the potentially unauthorized acceptance of public deposits. FINMA noted that, in the context of its ICO, the subject company “accepted funds amounting to approximately one hundred million francs from more than 30,000 investors in return for issuing EVN tokens in a bond-like form.”
Continue Reading Switzerland Announces ICO Enforcement Action
CFTC Issues Advisory on Digital Tokens
On July 16, 2018, the Commodity Futures Trading Commission issued a customer advisory on digital tokens.
Continue Reading CFTC Issues Advisory on Digital Tokens