SEC Staff Issues Statement on Bitcoin Futures
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SEC Chairman Testifies About Digital Assets
In a wide-ranging hearing before the House Financial Services Committee on May 6, 2021, SEC Chairman Gary Gensler addressed a number of SEC regulatory priorities, including the recent short-squeeze on so-called “meme stocks,” gamification of securities trading, broker-dealer payment for order flow, and climate change disclosure. During his first testimony before Congress as SEC chair, Gensler also answered a series of questions on cryptocurrency and digital asset regulation. The statements on crypto regulation begin to…
Rulemaking Petition Seeks SEC Guidance on NFTs
A recent rulemaking petition to the SEC requests that the agency issue a concept release on nonfungible tokens, or NFTs. The petition is hopeful that an SEC rulemaking paired with an opportunity for public input will resolve regulatory uncertainty for parties looking to create NFTs and facilitate their sale.…
Texas Legislature Proposes Significant Virtual Currency Bill
Texas is seeing considerable momentum with respect to a proposed digital asset law that is being considered in the 2021 legislative session in the form of House Bill 4474 (the “Virtual Currency Bill”). As the second largest economy in the United States, and the ninth largest economy in the world by GDP, the legislation could have one of the biggest impacts on digital asset industry since the New York BitLicense was introduced. In short, the…
The Nonfungible Token
A recent Bloomberg article reported that average prices for nonfungible tokens, or NFTs, are down approximately 70 percent from recent highs. NFTs are the latest innovation in digital assets and encompass digital representations of unique works of art, music, or other goods and experiences stored on blockchain. Unlike other digital assets such as bitcoin, in which each bitcoin is the same as every other one (and thus “fungible”), each NFT is theoretically unique and different…
Bipartisan Bill to Exclude Digital Tokens from Federal Securities Laws
On March 9, 2021, a bipartisan bill was reintroduced that would, among other things, exclude digital tokens from the definition of a security under federal securities laws. As introduced, H.R. 1628, known as the Token Taxonomy Act, would define a “digital token” as a token that is created pursuant to rules for which the creation and supply are not controlled by a central group or single person, among other requirements. To qualify as a…
New York Attorney General Announces Settlement with Bitfinex
As we have previously reported, the New York Attorney General has been in protracted litigation to enforce an investigative subpoena under New York’s expansive Martin Act against cryptocurrency exchange Bitfinex and its affiliated companies that issue the Tether stablecoin. On February 23, 2021, the Attorney General announced a definitive settlement of the matter. …
Treasury Secretary Skeptical of Bitcoin
In some of her first remarks on the subject of digital assets since Senate confirmation, Treasury Secretary Janet Yellen sounded an alarm on Bitcoin. Her views on the regulation of digital assets more broadly are sure to influence policy in the coming years at the various offices and bureaus within the Treasury Department that oversee the asset class, including the OCC, IRS, OFAC and FinCen.…
OFAC Settles with Digital Currency Services Provider for Apparent Violations of Multiple Sanctions Programs
The US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) settled with BitPay, Inc. for $507,375 to resolve 2,102 apparent violations of multiple US sanctions programs for allowing individuals located in sanctioned jurisdictions to use digital currency on its platform to transact with merchants in the United States and elsewhere.…
Two Bitcoin ETFs Approved for Sale in Canada
In the past week, Canadian securities regulators approved the offering of the first two Canadian Bitcoin ETFs. By holding Bitcoin, the Canadian funds intend to provide investors with economic exposure to the US dollar and Canadian dollar price of Bitcoin through an ETF structure. For ETF investors, the structures have the potential to eliminate much of the friction associated with holding Bitcoin or investing in the asset directly. The ETF units have been conditionally approved…