In recent months Bitcoin has become a hot topic in the financial, regulatory and legal community and has received widespread attention from newspapers such as The Wall Street Journal and The New York Times. Katten Muchin Rosenman LLP has been actively working on Bitcoin-related matters for the past year and has become a legal thought-leader in the area. As such, we would like to update our clients and friends on the current US regulatory developments regarding Bitcoin.

Bitcoin was introduced in 2009 and has produced a dynamic new economy composed of merchants, users, service providers and start-up enterprises. Over the past 12 months the value of bitcoins has appreciated by more than 6000 percent, and Bitcoin has achieved a current market capitalization of over $8 billion. In addition to gaining traction as a medium of exchange and a unit of account, Bitcoin has caught the attention of members of the financial industry, who are beginning to recognize Bitcoin for its potential as a short- and/or long-term investment opportunity. For example, the proposed Winklevoss Bitcoin Trust is designed to be the first exchange-traded fund product based in Bitcoin.