Maxwell J. Eichenberger

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On April 3, 2019, the U.S. Securities and Exchange Commission (SEC) took their first step towards providing greater clarity on the key question of how to evaluate whether transactions involving issuance or sales of digital tokens are sales of securities subject to U.S. securities laws and regulations. The guidance was released in two parts: First, the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub) published the “Framework for ‘Investment Contract’ Analysis of Digital Assets”…
On April 3, 2019, the U.S. Securities and Exchange Commission (SEC) took a first step toward providing greater clarity on the key question of how to evaluate whether transactions involving issuance or sales of digital tokens are sales of securities subject to U.S. securities laws and regulations. To read the full client alert, please visit reedsmith.com.…
The United States District Court for the Southern District of California recently changed course in an enforcement action brought by the U.S. Securities and Exchange Commission (SEC) against cryptocurrency company Blockvest, LLC and its founder. In doing so, the court granted the SEC’s request to preliminarily enjoin the defendants from violating the securities laws and analyzed what exactly it means to “offer” securities in the context of crypto-tokens. To review the full article on our…
As detailed in a prior post on this blog, the United States District Court for the Southern District of California previously denied the U.S. Securities and Exchange Commission’s (SEC) request for a preliminary injunction against Blockvest, LLC and its founder and chairman Reginald Buddy Ringgold, III (Ringgold).  Recently, upon reconsideration, the court changed course, finding that the SEC presented enough facts for the court to preliminarily enjoin Blockvest and Ringgold from further violating Section 17(a)…
The U.S. Securities and Exchange Commission (SEC) recently settled two initial coin offering (ICO) enforcement actions grounded on the sale of unregistered securities. The two settlements, one with CarrierEQ Inc. (or AirFox) and the other with Paragon Coin Inc., are the first time the SEC has imposed civil penalties on companies solely for offering digital tokens in an ICO. Notably, the settlements signal the SEC’s intent to enforce the securities laws against sellers of cryptocurrencies,…
On Friday, November 16, 2018, the U.S. Securities and Exchange Commission (SEC) announced that it settled two cases against digital token issuers. The settlements, one with CarrierEQ Inc. (AirFox) and the other with Paragon Coin Inc. (Paragon), are the first time that the SEC has imposed civil penalties on companies solely for offering digital tokens in an initial coin offering (ICO) that allegedly violates the securities laws. In addition to agreeing to pay civil fines…
With the plaintiffs’ bar setting its sights on initial coin offerings, a body of precedent will soon develop analyzing digital tokens under U.S. securities laws. Last week, United States Magistrate Judge Andrea M. Simonton began developing that body of law in Rensel v. Centra Tech, Inc., No. 17-CV-24500, 2018 BL 227097 (S.D. Fla. June 25, 2018). Although Judge Simonton’s opinion does not tackle many of crypto’s most-pressing questions, it serves as a guidepost for future…
While the SEC continues to target fraudulent crypto-projects, we’ve seen a marked increase in the number of class actions targeting a wider-range of ICOs.[1] The crypto-industry is watching these cases intently; awaiting the judiciary’s play in the on-going game of “Are Crypto-Tokens Securities?”. Earlier this week, United States Magistrate Judge Andrea M. Simonton (Southern District of Florida) laid an early card in Rensel v. Centra Tech, Inc.[2] Although the Report and Recommendation[3]
As Bitcoin’s (BTC) popularity continues to grow, its network built on 1MB blocks struggles to keep up with the growing number of transactions. Two groups within the Bitcoin community, the “Big Blockers” and “Decentralists,” disagree on how to address the blocksize issue. Big Blockers are focused on realizing Bitcoin’s potential to serve as a cash alternative and compete with traditional payment systems; but Decentralists fear that increasing the blocksize will compromise Bitcoin’s security by placing…
Bitcoin’s Blocksize Debate: Behind the scenes of Bitcoin’s (BTC) success, a debate continues about whether to expand the leading cryptocurrency’s blocksize from 1MB to 2MB. On one side, the “Big Blockers” want to increase Bitcoin’s blocksize, allowing the cryptocurrency to realize its potential as a cash alternative and compete with traditional payment systems. On the other side, the “Decentralists” worry that increasing Bitcoin’s blocksize will create barriers to entry for miners, compromising Bitcoin’s security and…