Show all postsFiltered by: Michael Weizel

SEC Declares Bitcoin and Ether as Non-Securities

On Thursday, June 14, 2018, the U.S. Securities and Exchange Commission’s (SEC)  Director of Corporate Finance, William Hinman (Hinman), announced that the commission would not be treating Ether or Bitcoin as securities. The SEC’s announcement is in line with the recent comments of SEC Chairman, Jay Clayton, who recently noted the difference between cryptocurrencies and digital tokens, saying that cryptocurrencies as “replacements for sovereign currencies” were not securities, while digital assets revolving around a venture are often securities.

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CFTC Staff Issues Advisory for Virtual Currency Products

On Monday, May 21, 2018, the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) and Division of Clearing and Risk (DCR) issued a joint staff advisory providing information and guidance relating to the listing of virtual currency derivative products to exchanges and clearinghouses registered with the CFTC. As well, the advisory emphasized the CFTC’s priorities in reviewing new virtual currency derivatives.

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NASAA Announces Initial Results of Operation Cryptosweep

On Monday, May 21, 2018, the North American Securities Administration Association (NASAA) announced a coordinated series of enforcement actions by state and provincial regulators in Canada and the United States to crack down on fraudulent Initial Coin Offerings (ICOs) and cryptocurrency investment products. To date, “Operation Cryptosweep” has resulted in nearly 70 inquiries and investigations, as well as 35 pending or completed enforcement actions related to ICOs or cryptocurrencies since the beginning of May, including the recent warning issued by the Ontario Securities Commission against five digital currency firms (as described in our recent blog post).

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SEC Releases Public Statement on Registration of Cryptocurrency Exchanges

On March 7, 2018, the U.S. Securities and Exchange Commission (the “SEC”) issued a public statement addressing the fact that many online trading platforms for cryptocurrencies and other digital assets are “potentially unlawful” and should be registered with the SEC.

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Swiss Regulators Set Precedent with Groundbreaking ICO Guidelines

On February 16, 2018, the Swiss Financial Market Supervisory Authority (FINMA) released a set of guidelines (the Guidelines) that sets out how it will handle inquiries from organizers of initial coin offerings (ICOs). Building on the principles outlined in FINMA’s guidance released in September, 2017, the Guidelines separate tokens into three categories: (i) payment tokens; (ii) utility tokens; and (iii) asset tokens, all as further described below. Tokens classified into a category will be subject to varying laws and regulations, and as such, FINMA will be taking a holistic approach, on a case by case basis, when assessing the characteristics of a proposed ICO and the associated token. FINMA’s landmark guidance represents a monumental development in the cryptocurrency space.

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Cryptocurrency: EU Warns While Spain Warms

In a statement released on February 12, 2018, the European Supervisory Authorities ("ESAs") for securities, banking, and insurance and pensions issued a warning to EU consumers outlining the risks involved with buying cryptocurrencies. Despite this warning, only two days later on February 14, 2018, it was reported that the Spanish government is in the process of establishing a comprehensive legal regime to encourage and foster the growth of the cryptocurrency and ICO markets in Spain.

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U.S. Senate Hearing Takes Cautious, Optimistic Tone on Cryptocurrencies

On Tuesday, February 6, 2018, the Chairman of the Securities and Exchange Commission (SEC) and the Chairman of the Commodity Futures Trading Commission (CFTC), met before the U.S. Senate Committee on Banking, Housing & Urban Affairs to discuss the future of regulation of cryptocurrencies.

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CSA Members Set Terms and Conditions for Crypto-Based Investment Fund Managers

With the rise in popularity of cryptocurrencies over the last 12 months, investors have been looking for ways to enter the market through legitimate, regulated vehicles. Several portfolio and investment fund managers (Managers) have entered the market and are or will offer cryptocurrency funds to qualified purchasers. Given the novel nature of blockchain technology and the associated cryptocurrencies – as compared to traditional asset classes – these funds present unique challenges, particularly with respect to valuation and security of the assets. Accordingly, these Managers have worked with the members of the Canadian Securities Administrators (the CSA) as part of the CSA Regulatory Sandbox initiative to ensure that appropriate measures are implemented to protect investors in this new asset class.

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Crypto Worldwide - South Korea

As home to one of the world’s most tech-savvy, digitally-connected populations and several of the top global digital currency exchanges, South Korea has been a hotbed for blockchain technology developments and cryptocurrency trading.

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SEC to Target Lawyers Assisting with ICOs

On January 22, 2018, Jay Clayton, Chairman of the Securities Exchange Commission (the “SEC”), issued a warning statement to lawyers assisting clients with ICOs and to companies who have, or are looking to, shift their focus to distributed ledger or blockchain technologies in his opening remarks at the Securities Regulation Institute. The SEC has the power to impose liability and penalties on lawyers who fail to satisfy their responsibility as gatekeepers to the capital markets. These remarks signal that lawyers may be a focus of the SEC as it seeks to regulate the world of ICOs.

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FINRA to Emphasize ICO Monitoring in 2018

On January 8, 2018, the Financial Industry Regulatory Authority (“FINRA” or the “organization”) released its 2018 Annual Regulatory and Examination Priorities Letter addressing the areas of focus for the organization for 2018. Of note, FINRA emphasized the need to “deepen [its] understanding” of initial coin offerings ("ICOs"), as the financing mechanism has dramatically increased in popularity over the course of 2017.

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SEC Issues Guidance on Celebrity Endorsements

On November 1, 2017, the U.S. Securities and Exchange Commission (the “SEC”) released a statement addressing the recent influx of celebrities that are endorsing and promoting investments in stocks and other investments, particularly Initial Coin Offerings (“ICOs”).

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CSA Provides Guidance on How Canadian Securities Law Applies to Cryptocurrencies

On August 24, 2017, in response to the growing number of cryptocurrency offerings, the Canadian Securities Administrators (the “CSA”) issued Staff Notice 46-307 - Cryptocurrency Offerings (the “Staff Notice”). Cryptocurrency offerings can appear in a number of forms, such as initial coin offerings (an “ICO”) or the sale of securities of cryptocurrency investment funds. In an attempt to clarify its position on these offerings, the CSA issued the Staff Notice to provide guidance on how securities law in Canada may apply to this emerging field and to specify the required obligations that must be met under the current applicable regulations.

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