The SEC suffered a significant loss last week in its ongoing legal battle with Ripple over the XRP digital token. While the District Court held that Ripple’s initial sales of XRP to institutional investors constituted the sale of unregistered securities,
Blockchain and the Law
The "Blockchain and the Law" blog, published by Proskauer Rose LLP, focuses on legal developments and regulatory issues related to blockchain technology, cryptocurrencies, and digital assets. It covers topics such as tokenized securities, stablecoin regulation, strategic Bitcoin reserves, and the evolving legal landscape for digital finance in the United States. The blog discusses federal and state legislative initiatives, regulatory proposals by agencies like the SEC, and the implications of new laws such as the GENIUS Act. It also addresses the intersection of blockchain with financial markets, compliance, and government policy, providing insights into how legal frameworks adapt to innovations in blockchain and crypto assets.
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CFTC Acts to Ensure Covered Entities Are Considering Evolving Risks from Digital Assets and Other Technologies
By Elanit Snow & Ally Kaden
In a post-FTX environment, several financial regulators are taking action to emphasize a policy of sound custody and disclosure practices and to better understand certain risks to protect customers in the event of an insolvency or similar proceeding. For example,…
The Crypto Wars Escalate
The gloves are off. The SEC’s recent enforcement actions against leading crypto exchanges suggest that the SEC has decided that time’s up for the crypto industry as it currently exists in the United States.
After spending years urging industry participants to…
Buyer Beware – FCA Publishes Financial Promotion Rules for Cryptoassets
On 8 June 2023, the UK Financial Conduct Authority (“FCA”) published a policy statement (PS23/6) on the financial promotion rules for cryptoassets (the “Policy Statement”). This is accompanied by a guidance consultation (GC23/1), where the FCA is seeking feedback on…
Part II: With New DAO Law on the Books, Utah Joins Race with Wyoming and Tennessee to Become U.S. “Crypto Capital”
By Jason Finger & Peter Cramer
As discussed in Part I of this series, state DAO LLC laws have been enacted in the last several years and have become one option for decentralized autonomous organizations (or DAOs) to create a so-called “legal wrapper” or real-world corporate…
Part I: With New DAO Law on the Books, Utah Joins Race with Wyoming and Tennessee to Become U.S. “Crypto Capital”
By Jason Finger & Peter Cramer
Little-known legal trivia: In 1977 Wyoming was the first state to pioneer the LLC, which is now a commonly applied legal innovation. Fast forward more than forty years…in July 2021, Wyoming again tried to be at the vanguard of new…
Recent Legislative Proposals and IRS Guidance on the Taxation of Digital Assets
This blog post summarizes recent federal bills that have been introduced (but not yet passed), proposals by the Biden Administration, and guidance issued by the Internal Revenue Service with respect to the taxation of digital assets.
DAO Deemed ‘General Partnership’ in Negligence Suit over Crypto Hack, Prompting Decentralized Orgs to Rethink Corporate Formation
In what appears to be an issue of first impression, a California district court ruled that various defendants allegedly holding governance tokens to the bZx DAO (or “Decentralized Autonomous Organization”), a protocol for tokenized margin trading and lending, could be…
Crypto Contagion – Managing Risk on Multiple Fronts
Crypto firm bankruptcies and resulting disruption in the crypto ecosystem will continue to exacerbate liquidity and regulatory concerns in this space. Since all participants supporting the crypto ecosystem are at risk, managing that risk is critical.
Fund managers should be…
CFTC Enforcement Highlights Potential Compliance Risks to Crypto Exchanges for Derivatives Trading
By Elanit Snow
Binance is the latest major crypto industry player to be sued by a U.S. regulator. On March 27, 2023, the CFTC announced that it had filed a civil enforcement action against Binance Holdings Limited (and related legal entities) (collectively, “Binance”),…