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From Uncertainty toward Regulatory Clarity: Senior SEC Officials Provide Regulatory Clarity for Digital Assets Summary is below, please click here for the full alert narrative. On June 14, 2018, the Director of the Division of Corporation Finance of the Securities and Exchange Commission delivered a speech outlining the framework used by the SEC Staff in evaluating whether a given token sale qualifies as a securities offering.  The Director clarified that a token sale may qualify…
From Uncertainty toward Regulatory Clarity: Senior SEC Officials Provide Regulatory Clarity for Digital Assets Summary is below, please click here for the full alert narrative. On June 14, 2018, the Director of the Division of Corporation Finance of the Securities and Exchange Commission delivered a speech outlining the framework used by the SEC Staff in evaluating whether a given token sale qualifies as a securities offering.  The Director clarified that a token sale may qualify…
U.S. Developments Regulatory Updates CFTC Staff Issues Advisory to Exchanges and Clearinghouses on Virtual Currency Derivatives On May 21, the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight and Division of Clearing and Risk released an advisory that provides guidance to designated contract markets (DCM), swap execution facilities (SEF), and derivatives clearing organizations (DCO) that offer derivatives with virtual currency underliers (the Advisory). The key take-aways are summarized below: The Advisory notes that virtual…
The City of Berkeley, California will be the first U.S. city to explore blockchain-based financing to tackle social issues such as affordable housing.  Mayor Jesse Arreguin and Councilmember Ben Bartlett are collaborating with the UC Berkeley Blockchain Lab and San Francisco-based financial startup Neighborly for the Berkeley Blockchain Initiative (“BBI”) to develop a tokenized municipal bond.  According to Forbes, Berkeley had a similar idea twenty years ago with a local currency called “Berkeley Bucks.”  This…
The City of Berkeley, California will be the first U.S. city to explore blockchain-based financing to tackle social issues such as affordable housing.  Mayor Jesse Arreguin and Councilmember Ben Bartlett are collaborating with the UC Berkeley Blockchain Lab and San Francisco-based financial startup Neighborly for the Berkeley Blockchain Initiative (“BBI”) to develop a tokenized municipal bond.  According to Forbes, Berkeley had a similar idea twenty years ago with a local currency called “Berkeley Bucks.”  This…
On February 9, 2018, the Hong Kong Securities and Futures Commission (“SFC”) released a statement which, among other things, informs the marketplace that the SFC sent letters to seven Hong Kong cryptocurrency exchanges warning against listing instruments that qualify as “securities” under the Securities and Futures Ordinance (“SFO”) without a required license.[1]  Additionally, the SFC sent letters to seven crypto token issuers inquiring about compliance with the securities laws. In response to the…
On February 9, 2018, the Hong Kong Securities and Futures Commission (“SFC”) released a statement which, among other things, informs the marketplace that the SFC sent letters to seven Hong Kong cryptocurrency exchanges warning against listing instruments that qualify as “securities” under the Securities and Futures Ordinance (“SFO”) without a required license.[1]  Additionally, the SFC sent letters to seven crypto token issuers inquiring about compliance with the securities laws. In response to the…
On January 30, 2018, dissatisfied crypto token purchasers filed a class action lawsuit against Paragon Coin, Inc. (“Paragon”) and founders Jessica VerSteeg and Egor Lavrov, alleging that the Paragon initial coin offering (“ICO”) violated the federal securities laws.[1]  This lawsuit follows those filed by plaintiffs against Centra, Tezos, ATBCoin, BitConnect, and Xunlei in connection with their ICOs in recent months.  One of the more high profile class action defendants is BitConnect, which is…
On January 30, 2018, dissatisfied crypto token purchasers filed a class action lawsuit against Paragon Coin, Inc. (“Paragon”) and founders Jessica VerSteeg and Egor Lavrov, alleging that the Paragon initial coin offering (“ICO”) violated the federal securities laws.[1]  This lawsuit follows those filed by plaintiffs against Centra, Tezos, ATBCoin, BitConnect, and Xunlei in connection with their ICOs in recent months.  One of the more high profile class action defendants is BitConnect, which is…
The U.S. Securities and Exchange Commission (“SEC”) is continuing to increase its scrutiny of companies that might be taking advantage of investor excitement for blockchain and cryptocurrency (ICO) deals to inflate their share prices and raise funds.  On January 8, 2018, the SEC suspended trading in the securities of Hong Kong-based UBI Blockchain Internet, Ltd. (“UBI Blockchain”) through at least January 22, 2018.  This action follows the SEC’s suspension of trading in the securities of…