Digital Currency + Blockchain Perspectives

People are often the most valuable asset for growing technology companies, and attracting and retaining top talent is all-the-more important when dealing with emerging technologies like blockchain and cryptocurrencies.  For most private companies, the path for creating meaningful incentives for service providers is well-trodden—they can use a traditional equity incentive plan to issue options, restricted stock, RSUs, phantom equity or profit interests, which may appreciate in value as the company grows.  But creating service provider…
The past few weeks have ushered in signs of what’s likely to come from the SEC’s Division of Enforcement under the Biden Administration, including a greater number of investigations and a tougher path to “bad boy” waivers for issuers.  The SEC’s enforcement program plays a critical role in the agency’s tripartite mission, especially with respect to the protection of investors.  The program, like many other aspects of the SEC, takes many of its cues from…
The blockchain and digital asset landscape continued to evolve in 2020. DeFi grew exponentially, venture funds are highly active, state and international jurisdictions are vying for crypto business, a crypto lawyer is head of the OCC, and Bitcoin has almost become mainstream. With the SEC, CFTC, FinCEN, DOJ, and the IRS exercising jurisdiction over aspects of blockchain-based businesses, as well as over off-shore companies and individuals, this presentation addresses the many issues to consider when…
The SEC, in one of the Commission’s final acts under the leadership of Chair Jay Clayton, approved enforcement action aimed at Ripple Labs, Inc. (“Ripple”) and two of its executives, Brad Garlinghouse and Chris Larsen. The SEC filed its complaint on December 22, 2020 in the Southern District of New York, alleging that sales of XRP during a period ranging from 2013 through 2020 constitute an ongoing unregistered offering of securities in violation of Section…
Read our full Client Alert here. Christmas came early for many in the digital asset community by way of a statement from the U.S. Securities and Exchange Commission (SEC) on December 23, 2020 that grants relief in the area of broker “custody” of digital asset securities. The framework laid out by the SEC will operate somewhat like a hybrid no-action letter/safe harbor/pilot program, pursuant to which “special purpose” brokers may follow certain, specific steps and…
U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton announced that December 23, 2020 would be his last day at the helm of the agency. This leads to the likely outcome that SEC Commissioner Hester Peirce, or potentially Commissioner Elad Roisman, will serve as interim Chair until approximately January 20, 2021 when President-Elect Biden is sworn in as President. At that point, it is likely that SEC Commissioner Allison Lee will become acting Chair until…
In early November 2020, the staff of the U.S. Securities and Exchange Commission (“SEC”) Division of Investment Management (“IM Division”), in consultation with the SEC’s “FinHub” staff, issued a statement in response to a No-Action Letter from the Wyoming Division of Banking purporting to provide interpretive guidance on both Wyoming and federal securities laws, including in the area of custody of digital assets. In sum, the SEC staff’s statement provides the following takeaways.  Unfortunately, these…
***This article was originally published in CoinDesk and can be found here – https://www.coindesk.com/bitmex-risks-for-defi  In October, the Commodity Futures Trading Commission (CFTC) and the U.S. Department of Justice (DOJ) filed enforcement actions against the entities and individuals that own and operate the Bitcoin Mercantile Exchange (BitMEX), a trading platform for cryptocurrency derivatives.  The CFTC alleges that since 2014 BitMEX has operated an unregistered trading platform and violated CFTC regulations by, among other things, failing to…
On Monday, November 16, 2020, SEC Chairman Jay Clayton announced his intention to depart from the agency by the end of 2020.  News of Clayton’s decision comes as no real surprise, as it is typical for the SEC Chair to hand the reigns to a successor around the time of an election for President.  What many had speculated about, however, was the eventual timing of Clayton’s move. The results of the November 3, 2020 election…
Please note, this is a summary to the article originally published in Fintech Futures. PayPal, which has 346 million customers and accounts for nearly 14% of online payments nationally, has announced that its U.S. customers will be able to buy, sell and hold a selection of cryptocurrencies via its digital wallet in the near future. Customers will be able to spend cryptocurrency via their PayPal wallet at all 26 million merchants. In 2021, PayPal…