Michael Fluhr

Latest Articles

A showdown is underway between the New York Attorney General’s Office and the companies that own and operate the cryptocurrency exchange Bitfinex and issue the stablecoin tether.  In short, after months of investigation, the AG’s office has filed a lawsuit under New York’s Martin Act (the NY laws regulating securities and commodities fraud) against the Bitfinex and Tether companies alleging that they may have defrauded Bitfinex customers and tether owners.  At the commencement of the…
The wake of the SEC’s guidance on classification of digital assets (here) and no-action letter to digital token issuer TurnKey Jet, Inc. (here), many may have forgotten or ignored that the final arbiter of the definition of “security” under federal law is not the SEC; it is the federal judiciary.  On March 31, 2019, Judge Vernon Broderick of the United States District Court for the Southern District of New York weighed…
On April 3, 2019, the SEC’s Strategic Hub for Innovation and Financial Technology (“FinHub”) issued a long-awaited framework for analyzing whether a given digital asset constitutes a “security” under federal law and is thus subject to the vast complex of federal securities laws and regulations.  Simultaneously, the SEC’s Division of Corporate Finance issued its first “no-action” letter for a digital token offering, stating that it will not recommend enforcement action to the Commission based on…
In an interesting twist, a federal court has revisited its earlier decision in SEC v. Blockvest, where it denied the SEC’s motion for a preliminary injunction against issuers of the BLV token, this time granting the SEC’s motion.  The opinion has important implications for cryptocurrency issuers.…
If you keep an ear tuned to recent developments in digital currency and blockchain, you’ve almost certainly heard the term “Security Token Offering” (or “STO”) bandied about.  But what exactly is an STO?  Is it legally, functionally, or technologically different than an ICO?  Or is this simply old wine in a new bottle?…
The legal status of cryptocurrency token airdrops under U.S. securities regulations remains a topic of great interest.  Many issuers wonder if they might use airdrops to avoid scrutiny of their token under U.S. securities regulations.  While the definitive answer remains unsettled, a recent order from the SEC suggests it may (rightly or wrongly) treat airdrops as securities.…
On February 6, 2018, SEC Chairman Jay Clayton and CFTC Chairman Christopher Giancarlo provided testimony on virtual currencies to the U.S. Senate Committee on Banking, Housing, and Urban Affairs.  Their written statements and testimony can be found here.  Below we provide a summary of the written statements and testimony and analysis for participants in the virtual currency and blockchain spaces. New Possibilities, New Risks Takeaway:  Both the SEC and CFTC recognize the potential use…