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

On July 11, 2018, in an emergency cease and desist order, the Texas securities commissioner took action against several individuals and affiliated companies based in Utah to halt the offering of unregistered cryptocurrency mining investments to Texas residents.
Continue Reading Texas Shuts Down Offering of Interests in Cryptocurrency Mining Businesses

In the race to develop blockchain technology, companies are increasingly devoting capital to creating proprietary blockchain solutions. A search of the U.S. Patent and Trademark Office as of today returns 343 patent applications that contain either “blockchain” or “distributed ledger” in the abstract.
Continue Reading Major Companies Are Quietly Amassing Blockchain Patents Across Industries

While ICO issuers have understandably been focused recently on the latest pronouncements from the SEC and other regulators, a second group of potential litigants has largely avoided notice. Seeing a potential bonanza, private plaintiffs law firms have become aggressive in soliciting disgruntled investors as clients and filing lawsuits against issuers of digital tokens.
Continue Reading Private Plaintiff Lawyers Are Actively Targeting ICOs

In an article written by Hunton Andrews Kurth lawyers in Crowdfund Insider, Richard Garabedian and Shaswat Das discuss the Financial Crimes Enforcement Network’s enforcement actions and related compliance issues. This blog contains a link to the full article.
Continue Reading AML and Sanctions Compliance Issues Facing Cryptocurrency Companies

North American Securities Administrators Association (“NASAA”) members from more than 40 jurisdictions across the United States and Canada are working together in “Operation Cryptosweep,” a coordinated series of enforcement actions to crack down on fraudulent initial coin offerings (“ICOs”), cryptocurrency-related investment products and the individuals behind them.  NASAA organized a task force of its members in April 2018 to begin these coordinated investigations, which identified hundreds of ICOs in the final stages of pre-launch preparation and other cryptocurrency-related investment products.
Continue Reading Operation Cryptosweep: Regulators in the United States and Canada Crack Down on ICOs

Last week, the Commodity Futures Trading Commission’s (“CFTC”) Division of Market Oversight and Division of Clearing and Risk issued a joint staff advisory providing guidance to exchanges and clearinghouses for listing virtual currency derivatives products.

The advisory relies on established rules and regulations as it clarifies the CFTC’s priorities and expectations in its review of new virtual currency derivatives products.  In the press release announcing the advisory, the CFTC stated its intent to exercise “appropriate oversight, while encouraging innovation and growth in these products.”Continue Reading CFTC Issues Advisory for Listing Virtual Currency Derivatives Products