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In March of this year, the NFA issued a notice reminded futures commission merchants (“FCM”), introducing brokers (“IB”), commodity pool operators (“CPO”) and commodity trading advisors (“CTA”) that trade in, solicit or accept orders in virtual currency products (spot and derivatives) of their ongoing obligation to notify the NFA of such activities by amending the annual questionnaire (please see Reed Smith client alert here).  More recently, the NFA issued an August 2018 Interpretive Notice…
Most companies considering an Initial Coin Offering to U.S. purchasers have resigned themselves to the fact that their proposed token or coin offering is likely to be considered an offering of securities by the Securities and Exchange Commission (“SEC”) and must be made in compliance with U.S. securities laws. The logical next question then becomes – “what are my options?” Traditional IPO A traditional initial public offering (“IPO”) of equity securities usually requires extensive meetings…
Governor John Kasich signed a bill into law on Friday, August 3, 2018, adding Ohio to the list of U.S. states enacting blockchain legislation.  Introduced last October and passed by the House at the end of June, SB 220 legally recognizes records or contracts and signatures secured through blockchain technology.  Specifically, the bill amends Section 1306.01 of Ohio’s Uniform Electronic Transactions Act, reflecting a “record or contract that is secured through blockchain technology is considered…
On July 18, 2018, Acting Director Mick Mulvaney of the Consumer Financial Protection Bureau (“CFPB”) announced that Paul Watkins will head the CFPB’s new Office of Innovation. According to the press release, the office, which Mulvaney created to focus on consumer-friendly innovation, “will focus on creating policies to facilitate innovation, engaging with entrepreneurs and regulators, and reviewing outdated or unnecessary regulations.” Watkins previously managed the first state fintech regulatory sandbox in the United States…
CFTC Customer Advisory On Monday, the Commodity Futures Trading Commission (“CFTC” or “Commission”) issued its fourth virtual currency customer advisory, Customer Advisory 7756-18, as part of its outreach effort to educate market participants.  Titled, Use Caution When Buying Digital Coins or Tokens, the advisory warns customers of the risks of speculation of future value and fraud; it ultimately advises that the best protection is to exercise caution and to extensively research digital tokens and…
Last week, the Market Oversight and Clearing and Risk Divisions of the Commodity Futures Trading Commission (“CFTC” or “Commission”) issued Staff Advisory No. 18-14 regarding virtual currency derivative product listings. The advisory serves as guidance to exchanges and clearinghouses in the context of listing derivative contracts based on virtual currency under Commission Regulations 40.2 (self-certification) or 40.3 (voluntary submission for Commission review and approval) in order to promote effectiveness and efficiency in the emerging area…
One of the greatest developments for marketers in 2018 is likely to be the proliferation of new and innovative applications on the blockchain in the context of marketing and promotion, particularly in connection with loyalty programs, ad fraud mitigation, and ongoing CRM activities that combine brand affinity and peer-to-peer influencing.  The potential magnitude of the changes that the promotion marketing industry could see in the next 12 months, especially in the loyalty area, is simultaneously…
One of the greatest developments for marketers in 2018 is likely to be the proliferation of new and innovative applications on the blockchain in the context of marketing and promotion, particularly in connection with loyalty programs, ad fraud mitigation, and ongoing CRM activities that combine brand affinity and peer-to-peer influencing.  The potential magnitude of the changes that the promotion marketing industry could see in the next 12 months, especially in the loyalty area, is simultaneously…
This week, the Massachusetts Secretary of State ordered five companies, 18Moons, Across Platforms, Mattervest, Pink Ribbon, and Sparko, to cease and desist from engaging in initial coin offering (“ICO”) campaigns as part of an ongoing government investigation of token sales.  The companies allegedly offered and sold unregistered securities in violation of the Massachusetts Uniform Securities Act (Chapter 110A of Massachusetts’ General Laws) and corresponding regulations.  The orders, among other things, (1) prohibit the companies from…
Startups often are at the forefront of creating unique solutions with the ability to have a tremendous impact on various industries. The Miami Blockchain Group, a legal technology startup, has created a novel blockchain application specifically for the international dispute resolution community. The Smart Arbitration & Mediation Blockchain Application, SAMBA, debuted at the 2018 Global Legal Institute for Peace Conference at the University of São Paulo on March 14. Recent news about blockchain has focused…