News & Analysis as of

Howey Initial Coin Offering (ICOs)

Cornerstone Research

SEC Enforcement of Cryptocurrency Reaches a New High

Cornerstone Research on

More than 50% increase in SEC cryptocurrency-related enforcement actions in 2023 over 2022. The Securities and Exchange Commission (SEC) continues to view cryptocurrency-related enforcement as a top priority, bringing 46...more

Seward & Kissel LLP

NFT Issuer Gives SEC Easy Layup for First NFT Enforcement Action

Seward & Kissel LLP on

On Aug. 28. 2023, the SEC issued a settled Order against Impact Theory, LLC in connection with its offer and sale of non-fungible tokens (NFTs). It was the first SEC enforcement action involving NFTs....more

Kramer Levin Naftalis & Frankel LLP

The SEC’s Limited Guidance on Crypto Tokens in No-Action Letters

The Securities and Exchange Commission (SEC or Commission) has been accused of “regulation by enforcement” when it comes to the standard for determining whether a crypto token is a security. Part of this stems from the fact...more

Morrison & Foerster LLP

Court Rules LBRY Token Is a Security in Another SEC Crypto Win

Morrison & Foerster LLP on

On November 7, 2022, Judge Paul J. Barbadoro in the United States District Court for the District of New Hampshire granted summary judgment in favor of the Securities and Exchange Commission against the content sharing...more

Mintz

An SEC Win - US District Court Judge Rules LBRY’s LBC Token a Security

Mintz on

In a significant victory for the SEC, US District Court Judge Paul J. Barbadoro granted summary judgment to the SEC in what is the first enforcement action targeting a cryptocurrency not issued via an initial coin officer...more

Sheppard Mullin Richter & Hampton LLP

Federal Court Rules LBRY Offered Security and Rejects Arguments SEC Did Not Provide Fair Notice

We have previously posted about the SEC lawsuit against LBRY. In that post, we noted that while the crypto community is rightfully focused on the Ripple case to see how the SEC will fare in court on enforcements alleging...more

Mintz

Keeping Up With Kim Kardashian’s Crypto – SEC Fines Kardashian $1.26 Million For Undisclosed Crypto Promotion

Mintz on

Kim Kardashian, the reality television personality, social media star, and entrepreneur has agreed to pay $1.26 million to settle the SEC’s claims that she improperly touted a crypto token without disclosing that she had been...more

Tonkon Torp LLP

Can Some NFTs be Considered Securities? The SEC Is Watching

Tonkon Torp LLP on

The U.S. Securities and Exchange Commission (SEC) is ramping up its investigation and potential enforcement activities against sellers of nonfungible tokens (NFTs) and marketplaces that connect buyers and sellers. Regulators...more

UB Greensfelder LLP

Comparing Apples To Orange [Groves]: How The SEC Defines Digital Assets As Securities

UB Greensfelder LLP on

In any classic securities regulation textbook, you’ll be sure to find a chapter called “Definition of a Security.” Besides your typical bonds and stocks, which are easily identifiable as securities, the most infamous (and a...more

Snell & Wilmer

Cryptocurrency: Tombstones on the Road to Regulatory Clarity

Snell & Wilmer on

In the intersection of financial markets and the internet, sometimes it seems like the only certainty in the year of cryptocurrency and “meme stocks,” like GameStop and AMC, is the continuing legal haze of cryptocurrencies....more

Proskauer - Blockchain and the Law

NFTs Are Interesting but Fractionalized Non-Fungible Tokens (F-NFTs) May Present Even More Challenging Legal Issues

Except for the extensive coverage surrounding Coinbase’s IPO last week and the volatility in the price of cryptocurrencies, much of the air in the crypto space in the last few months has been taken up by the meteoric rise of...more

Proskauer - The Capital Commitment

Three Critical Questions That Will (Hopefully) be Answered by the SEC’s Lawsuit against Ripple

Late last year, the SEC filed a litigated action in the U.S. District Court for the Southern District of New York against Ripple Labs Inc. and two of its executive officers (collectively, “Ripple”), alleging that Ripple...more

Faegre Drinker Biddle & Reath LLP

U.S. District Judge Rejects Argument that Sale of “Stand-In” Tokens Was Not a Sale of Unregistered Securities

On January 8, 2021, Judge Richard Seeborg of the United States District Court for the Northern District of California issued an Order denying a motion to dismiss in S.E.C. v. NAC Foundation, LLC, et al. The U.S. Securities &...more

Orrick - On the Chain

The SEC Gets its Kiks out of a Successful Application of the Howey Test

Orrick - On the Chain on

In a closely-watched cryptocurrency case, on September 30, the Southern District of New York ruled in favor of the SEC in SEC v. Kik Interactive, Inc., holding that the Kin tokens Kik had offered and sold through a pre-sale...more

Cozen O'Connor

Has the SAFT Been KIKed to the Curb?

Cozen O'Connor on

On September 30, 2020, SDNY Judge Alvin Hellerstein issued a decision of major significance for the digital token industry in Securities and Exchange Commission v. Kik Interactive, Inc. This is only the second federal court...more

Fenwick & West LLP

SEC Commissioner Dissents in Crypto Enforcement Action

Fenwick & West LLP on

The Securities and Exchange Commission (SEC) announced on September 15, 2020, that it charged online esports gaming and gambling platform Unikrn with violations of Section 5 of the Securities Act of 1933 (Securities Act) for...more

Stinson - Corporate & Securities Law Blog

SDNY Grants Preliminary Injunction to Halt Telegram Coin Offering

The Southern District of New York granted the SEC’s request for a preliminary injunction halting a coin offering in Securities and Exchange Commission v. Telegram Group Inc. et al....more

Sullivan & Worcester

Return of the ICO? A Potential Pathway Forward

Sullivan & Worcester on

On February 6, 2020, SEC Commissioner Hester Peirce presented her proposal of a new regulatory scheme for legal ICOs in the United States (“Safe Harbor”). To date, token issuers have struggled with the U.S. Securities and...more

Latham & Watkins LLP

The Yellow Brick Road for Consumer Tokens: The Path to SEC and CFTC Compliance - An Update

Latham & Watkins LLP on

Developing a framework for consumer tokens - With the rapid growth in the development of blockchain technology, virtual currencies and token sales (sometimes referred to as initial coin offerings, or ICOs), token...more

Proskauer - Blockchain and the Law

CFTC Chairman States Ether is a Commodity

In remarks made at the Yahoo! All Markets Summit in New York, Heath Tarbert, Chairman of the U.S. Commodity Futures Trading Commission (CFTC), said that he believed the Ether cryptocurrency was a “commodity” and should be...more

Sullivan & Worcester

Ether Is…a Commodity

Sullivan & Worcester on

It is official. Finally. On October 10, 2019, the Commodity Futures Trading Commission (“CFTC”) Chairman Heath Tarbert announced that he believes ether is a commodity and thus falls under the jurisdiction of the CFTC....more

Wilson Sonsini Goodrich & Rosati

Conducting a Token Offering Under Regulation A

This white paper discusses considerations related to conducting a token offering under Regulation A under the Securities Act of 1933 (the “Securities Act”). The benefit of this strategy is that it can allow broad...more

Barnea Jaffa Lande & Co.

An Important Milestone - First Supervised Security Token Offering

After a long wait, the US Securities and Exchange Commission (SEC) has permitted a startup company to raise funds from the general public through a supervised security token offering (STO) under Reg A+ regulations....more

Orrick - On the Chain

The SEC Can’t Keep Kik-ing the Crypto Can

Orrick - On the Chain on

On June 4, 2019, the SEC sued Kik Interactive Inc. (“Kik”), a privately held Canadian company, in the Southern District of New York, alleging that Kik’s offer and sale of $100 million worth of Kin tokens in 2017 constituted...more

Proskauer - Blockchain and the Law

SEC Sues Kik for ICO

On June 4, 2019, the U.S. Securities and Exchange Commission (the “SEC”) filed a complaint in the Southern District of New York against Kik Interactive Inc. (“Kik”) alleging violations of Section 5 of the Securities Act of...more

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