Last week, a commissioner at the Securities and Exchange Commission proposed a rule that would provide a bright line when a digital asset initially issued to raise funds to help develop a new network might later be regarded...more
2/11/2020
/ AML/CFT ,
Blockchain ,
Broker-Dealer ,
Cryptocurrency ,
Digital Assets ,
Distributed Ledger Technology (DLT) ,
Enforcement Actions ,
Initial Coin Offering (ICOs) ,
Registration Requirement ,
Safe Harbors ,
Securities and Exchange Commission (SEC) ,
Token Sales ,
Virtual Currency
Will the fourth time be the charm? This week, the Commodity Futures Trading Commission will try for the fourth time since 2011 to revise its speculative position limits rules. Details have not been made public, but Heath...more
1/28/2020
/ Aiding and Abetting ,
Blockchain ,
Bona Fide Hedging ,
CBOE Futures Exchange (CFE) ,
CFTC ,
Criminal Prosecution ,
Derivatives ,
Dodd-Frank ,
Enforcement Actions ,
Initial Coin Offering (ICOs) ,
Position Limits ,
Proposed Amendments ,
Proposed Regulation ,
Proposed Rules ,
Securities and Exchange Commission (SEC) ,
Spoofing ,
Swaps
The New York State Department of Financial Services proposed a self-certification regime for the approval of new digital coins by licensed virtual currency firms similar to the process applied by the Commodity Futures Trading...more
12/17/2019
/ Bitcoin ,
BitLicense ,
Broker-Dealer ,
CFTC ,
Cryptoassets ,
Cryptocurrency ,
Cybersecurity ,
Distributed Ledger Technology (DLT) ,
Final Rules ,
Financial Institutions ,
Initial Coin Offering (ICOs) ,
NYDFS ,
Regulatory Requirements ,
Securities and Exchange Commission (SEC) ,
Self-Certification ,
Swap Dealers ,
Virtual Currency
A social media company and its wholly owned subsidiary sued by the Securities and Exchange Commission for conducting an offering of an unregistered digital security claimed that the agency was wrong in its characterization of...more
11/19/2019
/ Broker-Dealer ,
CFTC ,
Cross-Border Transactions ,
Cryptoassets ,
Cryptocurrency ,
Deferred Prosecution Agreements ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Initial Coin Offering (ICOs) ,
IOSCO ,
Professional Disciplinary Actions ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Swap Dealers ,
Unregistered Securities ,
Virtual Currency
The Department of Justice raised the stakes in spoofing enforcement actions by including racketeering charges in an indictment filed last week alleging spoofing by three traders over many years. The Commodity Futures Trading...more
9/24/2019
/ Broker-Dealer ,
CFTC ,
Code of Conduct ,
Commodity Futures Contracts ,
Criminal Convictions ,
Criminal Prosecution ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Financial Institutions ,
Indictments ,
Initial Coin Offering (ICOs) ,
Price Manipulation ,
Racketeering ,
RICO ,
Securities and Exchange Commission (SEC) ,
Spoofing ,
Unfair or Deceptive Trade Practices ,
Volcker Rule
A clearing organization for futures and securities was sanctioned US $20 million in aggregate by the Commodity Futures Trading Commission and the Securities and Exchange Commission for allegedly not having and following...more
9/10/2019
/ Bitcoin ,
CFTC ,
Compliance ,
Criminal Prosecution ,
Cryptocurrency ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Financial Markets ,
Initial Coin Offering (ICOs) ,
National Futures Association ,
NYDFS ,
OCC ,
Policies and Procedures ,
Putative Class Actions ,
Risk Management ,
Securities and Exchange Commission (SEC) ,
Spoofing ,
Summary Judgment
Two food giants agreed to resolve charges brought by the Commodity Futures Trading Commission that they manipulated or attempted to manipulate prices of the Chicago Board of Trade’s December 2011 wheat futures contract and...more
8/19/2019
/ Amended Rules ,
Bitcoin ,
Blockchain ,
CFTC ,
Commodity Futures Contracts ,
Consent Order ,
Cryptocurrency ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Initial Coin Offering (ICOs) ,
NYDFS ,
Price Manipulation ,
Registration Requirement ,
Securities and Exchange Commission (SEC)
Last week a Canada-based social media company answered charges filed against it by the Securities and Exchange Commission in June 2019 that alleged its 2017 initial sale of digital tokens constituted an unlawful securities...more
8/13/2019
/ Bitcoin ,
Blockchain ,
Cryptocurrency ,
Digital Assets ,
Enforcement Actions ,
Financial Conduct Authority (FCA) ,
Financial Industry Regulatory Authority (FINRA) ,
Initial Coin Offering (ICOs) ,
Securities and Exchange Commission (SEC) ,
Token Sales ,
UK ,
Virtual Currency
Staff of the Securities and Exchange Commission and the Financial Industry Regulatory Authority issued a joint statement setting forth concerns they have with the ability of broker-dealers to comply with the SEC’s Customer...more
7/16/2019
/ Books & Records ,
Broker-Dealer ,
CFTC ,
Customer Protection Rule ,
Digital Assets ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Services Industry ,
Financial Stability Board ,
Initial Coin Offering (ICOs) ,
Investment Management ,
Joint Statements ,
Reporting Requirements ,
Securities and Exchange Commission (SEC) ,
SIPA
On May 9, the Financial Crimes Enforcement Network of the US Department of the Treasury (FinCEN) issued guidance relating to how its regulations apply to certain businesses that transact in "convertible virtual currencies"...more
6/26/2019
/ Bank Secrecy Act ,
Blockchain ,
CFTC ,
Convertible Virtual Currencies (CVCs) ,
Cryptocurrency ,
Distributed Ledger Technology (DLT) ,
Exemptions ,
Financial Institutions ,
FinCEN ,
Initial Coin Offering (ICOs) ,
Money Laundering ,
Money Services Business ,
Money Transfer ,
Money Transmitter ,
New Guidance ,
Popular ,
Securities and Exchange Commission (SEC) ,
Token Sales
Last week, a Canada-based social media company was sued by the Securities and Exchange Commission for purportedly conducting an unregistered securities offering to United States persons in connection with an initial coin...more
6/11/2019
/ ASIC ,
Blockchain ,
Broker-Dealer ,
CFTC ,
Cryptoassets ,
Cryptocurrency ,
Enforcement Actions ,
Fiduciary Duty ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Stability Board ,
Initial Coin Offering (ICOs) ,
Investment Adviser ,
IOSCO ,
New Regulations ,
Proposed Rules ,
Regulatory Requirements ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Token Sales ,
Unregistered Securities ,
Virtual Currency
Last week may not have been the best of times or the worst of times (to borrow from Charles Dickens), but it was undoubtedly a time that three United States financial services regulators issued important guidance on disparate...more
5/14/2019
/ CFTC ,
Criminal Prosecution ,
Cryptocurrency ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
FinCEN ,
Initial Coin Offering (ICOs) ,
New Guidance ,
Proposed Rules ,
Securities and Exchange Commission (SEC) ,
Virtual Currency ,
Whistleblowers
(You Say Security, I Say Utility; Midtrial Acquittal) -
The Securities and Exchange Commission’s FinHub group issued guidance last week, providing a checklist of characteristics to help determine whether a cryptoasset may...more
4/9/2019
/ Aiding and Abetting ,
Blockchain ,
CFTC ,
Criminal Conspiracy ,
Cryptoassets ,
Cryptocurrency ,
Department of Justice (DOJ) ,
FinHub ,
Howey ,
Initial Coin Offering (ICOs) ,
No-Action Letters ,
Securities and Exchange Commission (SEC) ,
Smart Contracts ,
Token Sales ,
UK Brexit
The US Department of Justice vehemently opposed the request for a new trial by the first person charged, convicted and sentenced under the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition against...more
2/26/2019
/ Anti-Money Laundering ,
Blockchain ,
CFTC ,
Cryptocurrency ,
Department of Justice (DOJ) ,
Dodd-Frank ,
Enforcement Actions ,
Hong Kong ,
Howey ,
Initial Coin Offering (ICOs) ,
ISDA ,
Professional Disciplinary Actions ,
Registration Requirement ,
Securities and Exchange Commission (SEC) ,
Token Sales ,
Unregistered Securities
Last week, the Securities and Exchange Commission obtained a reversal of a November 2018 decision by a federal court in California that denied it a preliminary injunction against an issuer of digital tokens that the SEC...more
The UK Financial Conduct Authority issued proposed guidance concluding that only security tokens among the three principal types of cryptoassets are under the regulator’s oversight umbrella. Cryptocurrencies and utility...more
1/29/2019
/ Bitcoin ,
Consultation ,
Cryptoassets ,
Cryptocurrency ,
ETFs ,
Financial Conduct Authority (FCA) ,
Financial Industry Regulatory Authority (FINRA) ,
Initial Coin Offering (ICOs) ,
Money Transmitter ,
SEC Examination Priorities ,
UK
The Commodity Futures Trading Commission’s Division of Enforcement issued its annual report last week; it said the purpose of its enforcement program was to engender a “true culture of compliance.” The Division suggested the...more
11/20/2018
/ Blockchain ,
CFTC ,
Cryptocurrency ,
Digital Realty Trust Inc v Somers ,
Dodd-Frank ,
Enforcement Actions ,
Initial Coin Offering (ICOs) ,
Registration Requirement ,
Securities and Exchange Commission (SEC) ,
Token Sales ,
Virtual Currency ,
Whistleblowers
During the prior two weeks, three financial authorities in the United Kingdom as well as the Hong Kong Securities and Futures Commission issued reports assessing distributed ledger technology and risks associated with the...more
11/5/2018
/ Accredited Investors ,
Bitcoin ,
Cryptoassets ,
Cryptocurrency ,
Derivatives ,
Enforcement ,
Enforcement Actions ,
Financial Conduct Authority (FCA) ,
Financial Industry Regulatory Authority (FINRA) ,
Futures ,
Hong Kong ,
Hong Kong Securities and Futures Commission (HKSFC) ,
Initial Coin Offering (ICOs) ,
Prudential Regulation Authority (PRA) ,
Retail Investors ,
UK
A federal court in Brooklyn, New York, issued a much-anticipated decision, holding that digital assets issued as part of initial coin offerings could be securities under applicable law. Although this decision was issued...more
The Securities and Exchange Commission banned the founder of a company that it claimed was involved in an illicit initial coin offering of a new digital token from ever serving as an officer or a director of a publicly-traded...more
The Securities and Exchange Commission and the Financial Industry Regulatory Authority collectively fined a broker-dealer over US $6.1 million for not having an anti-money laundering program reasonably designed to detect and...more
The chief executive officer of a major worldwide banking group agreed to pay the equivalent of US $870,000 as fines to two United Kingdom regulators, and had the equivalent of US $677,000 of prior pay clawed back by his...more
5/15/2018
/ Barclays ,
CFTC ,
Corporate Fines ,
Criminal Conspiracy ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Futures ,
Indictments ,
Initial Coin Offering (ICOs) ,
Insider Trading ,
Price-Fixing ,
UK ,
Whistleblower Protection Policies ,
Whistleblowers
Last week, a broker-dealer was fined US $1.575 million by the Financial Industry Regulatory Authority and other self-regulatory organizations for not complying with market access requirements for gatekeepers, while the...more
4/16/2018
/ Broker-Dealer ,
CFTC ,
Cryptocurrency ,
Department of Justice (DOJ) ,
Dodd-Frank ,
Enforcement Actions ,
Excessive Fees ,
Financial Industry Regulatory Authority (FINRA) ,
Fines ,
Fraud ,
Initial Coin Offering (ICOs) ,
Investment Adviser ,
OCIE ,
Record Retention ,
Securities and Exchange Commission (SEC) ,
Spoofing
Two broker-dealers’ purported failure to act on red flags – both involving customer trading – resulted in separate Securities and Exchange Commission enforcement actions against the firms. In connection with one action, two...more
The Department of Justice and the Securities and Exchange Commission opposed a motion to dismiss filed by a defendant named in a criminal indictment, charging him with offering and selling two types of digital tokens issued...more
3/26/2018
/ CFTC ,
Criminal Prosecution ,
Cryptocurrency ,
Department of Justice (DOJ) ,
G20 ,
Indictments ,
Initial Coin Offering (ICOs) ,
IRS ,
Securities ,
Securities and Exchange Commission (SEC) ,
Token Sales ,
Virtual Currency