On July 20, 2021, New Jersey’s Acting Attorney General announced that the State’s Bureau of Securities issued a Summary Cease and Desist Order to stop BlockFi, Inc. from selling unregistered securities in the form of interest-bearing cryptocurrency accounts. While commentators frequently focus on the enforcement activities of the Securities and Exchange Commission in the crypto space, New Jersey’s action against DeFi platform BlockFi serves as a reminder that state securities regulators also actively police this marketplace.
Continue Reading New Jersey Orders DeFi Platform to Cease Offering Interest-Bearing Crypto Accounts

Mark Alexander Hopkins, known as “Doctor Bitcoin,” pled guilty in the Northern District of Texas on June 29, 2021, to illegally operating a cash-to-cryptocurrency conversion business. According to a press release from the Department of Justice, Hopkins pled guilty to one count of operation of an unlicensed money transmitter business.
Continue Reading “Doctor Bitcoin” Pleads Guilty to Illegal Crypto Conversion Scheme

On June 10, 2021, the Texas Department of Banking issued an industry notice addressing the authority of Texas state-chartered banks to provide virtual currency services to customers. This is a notable development as Texas has the most state-chartered banks of any state in the country.
Continue Reading Texas Department of Banking Clarifies Authority of State Banks to Provide Virtual Currency Custody Services

On May 11, 2021, staff in the Division of Investment Management (IM) at the Securities and Exchange Commission issued a statement (the Statement) on “Funds Registered Under the Investment Company Act Investing in the Bitcoin Futures Market.” The Statement provides a series of warnings to retail investors about certain risks associated with investments in registered mutual funds whose portfolios include Bitcoin futures. But the Statement also provides further insight into the way SEC staff analyze the market for Bitcoin Futures more broadly.
Continue Reading SEC Staff Issues Statement on Bitcoin Futures

Texas is seeing considerable momentum with respect to a proposed digital asset law that is being considered in the 2021 legislative session in the form of House Bill 4474. In short, the Texas Virtual Currency Bill provides a basic legal framework for companies dealing with virtual currencies.
Continue Reading Texas Legislature Proposes Significant Virtual Currency Bill

In some of her first remarks on the subject of digital assets since Senate confirmation, Treasury Secretary Janet Yellen sounded an alarm on Bitcoin. In an interview with CNBC’s Andrew Ross Sorkin, Secretary Yellen described Bitcoin as frequently used “for illicit finance” and “an extremely inefficient way of conducting transactions.”
Continue Reading Treasury Secretary Skeptical of Bitcoin

The US Department of the Treasury’s Office of Foreign Assets Control settled with BitPay, Inc. for $507,375 to resolve 2,102 apparent violations of multiple US sanctions programs for allowing individuals located in sanctioned jurisdictions to use digital currency on its platform to transact with merchants in the United States and elsewhere.
Continue Reading OFAC Settles with Digital Currency Services Provider for Apparent Violations of Multiple Sanctions Programs

In the past week, Canadian securities regulators approved the offering of the first two Canadian Bitcoin ETFs. By holding Bitcoin, the Canadian funds intend to provide investors with access to the US dollar and Canadian dollar price of Bitcoin through an ETF structure. The ETF units have been conditionally approved for listing on the Toronto Stock Exchange.
Continue Reading Two Bitcoin ETFs Approved for Sale in Canada