On November 1, 2018, the New York Department of Financial Services announced its approval of the first virtual currency license for an operator of Bitcoin teller machines. According to DFS, to date it has now approved 12 charters or licenses for companies in the virtual currency space.
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SEC Annual Enforcement Report Highlights Crypto and DLT Cases
The SEC’s Division of Enforcement (Division) released its latest Annual Report (Report) on November 2, 2018. The fiscal year that ended September 30, 2018, was a busy one for the SEC in the crypto and distributed ledger technology space, and the Report includes a discussion of the SEC’s initiatives on this front.
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Alibaba Wins Preliminary Injunction Against Developers of Cryptocurrency “AlibabaCoin” In Trademark Dispute
On Monday, October 22, 2018, Judge J. Paul Oetken of the Southern District of New York granted Alibaba Group Holding Limited’s motion for preliminary injunction in a trademark action against several foreign-based promoters and developers of a new cryptocurrency called “AlibabaCoin.” In doing so, the court considered several novel issues around personal jurisdiction and blockchain.
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“Crypto-Property:” Ohio Court Says Crypto-Currency is Personal Property Under Homeowners’ Policy
As reported on the Hunton Insurance Recovery Blog, in what appears to be a case of first impression, an Ohio trial court ruled in Kimmelman v. Wayne Insurance Group that the crypto-currency, Bitcoin, constitutes personal property in the context of a first-party homeowners’ insurance policy and, therefore, its theft would not be subject to the policy’s $200 sublimit for loss of “money.”
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Senate Banking Committee Explores Blockchain
On October 11, 2018, the Senate Banking Committee held a wide-ranging hearing entitled “Exploring the Cryptocurrency and Blockchain Ecosystem.” The hearing featured testimony from Dr. Nouriel Roubini, an NYU professor who famously predicted the 2007-2008 financial crisis, as well as a counterpoint from Mr. Peter Van Valkenburgh, the Director of Research from Coin Center.
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The Venezuelan Petro: A Blocked and Chained Cryptocurrency in the United States
On October 2, 2018, Venezuelan President Nicolas Maduro appeared on national television and announced the official launch of the Venezuelan Petro cryptocurrency. While the official website and wallet for the Petro appear to have launched and be fully operational, and it appears to be presently trading in various cryptocurrency exchanges, United States persons should be extremely wary of trading or investing in the Petro.
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Members of Congress Request SEC Guidance on Crypto Assets
A recent bipartisan letter from Members of Congress seeks clarification from SEC Chairman Jay Clayton as to the status of digital tokens and cryptocurrencies under the federal securities laws. The signatories expressed their view that not all digital tokens should be deemed securities, and voiced their concern that the SEC should not use its enforcement mechanism alone to craft policy on this issue.
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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.
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The Promise of Blockchain Technology in Annual Meetings and Corporate Governance
For many public companies, the annual meeting voting process is littered with intermediaries and inefficiencies that can result in a lack of shareholder engagement. Blockchain technology has several potential applications that can remedy these inefficiencies and restore shareholder trust and engagement.
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Recent Congressional Action Involving Digital Assets and Blockchain Technology
Interest in the crypto economy continues to grow in Congress with the introduction of roundtables, hearings and new legislation.
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