Podcast: Is Cryptocurrency a Security (like an orange grove)?
The Division’s statement specifically addresses the mining of crypto assets that are intrinsically linked to the programmatic functioning of a public, permissionless network. These assets, referred to by the Division as...more
On July 13, 2023, the Court ruled in partial favor of Ripple Labs Inc.’s argument that many of its XRP sales did not violate investor-protection laws. The ruling has sent the crypto world ablaze with speculation on the future...more
The Securities and Exchange Commission recently brought its first two enforcement actions against issuers of non-fungible tokens (NFTs), resulting in cease-and-desist orders, penalties and other remedies, finding that the...more
The SEC suffered a significant loss last week in its ongoing legal battle with Ripple over the XRP digital token. While the District Court held that Ripple’s initial sales of XRP to institutional investors constituted the...more
Dapper Labs was founded in 2018 shortly after the debut of its first NFT collection, “CryptoKitties,” which was so successful it created a bottleneck of transactions on the decentralized Ethereum Network. Seeking faster...more
On February 22, 2023, Judge Victor Marrero of the U.S. District Court for the Southern District of New York issued an order in Friel v. Dapper Labs, Inc., denying Dapper Labs and its CEO’s motion to dismiss a putative...more
While a conclusion to the much-hyped case may be approaching, market participants should be wary of doomsday prognostications. As a new year begins, the digital assets industry is still enduring a deep and widespread crypto...more
The New Hampshire District Court recently granted summary judgment in favor of the Securities and Exchange Commission (SEC) in SEC v. LBRY, Inc., concluding that the native token of the blockchain protocol and network...more
In granting the SEC’s motion for summary judgment, a federal court ruled that sales of LBC tokens were securities transactions. On November 7, 2022, the Securities and Exchange Commission (SEC) prevailed in a motion for...more
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
With offerings across a growing number of online platforms and increased trading volume, NFT issuers, promoters, and buyers should consider the legal and regulatory implications relating to NFTs and federal securities laws. ...more
On March 24, 2020, Judge P. Kevin Castel of the Southern District of New York granted the U.S. Securities Exchange Commission (“SEC”) an injunction to prevent Telegram Group Inc. and TON Issuer Inc. (collectively, “Telegram”)...more
Speaking at the International Blockchain Congress in Chicago on February 6, 2020, SEC Commissioner Hester Peirce proposed a safe harbor from U.S. securities laws so that developers of blockchain protocols could offer and sell...more
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
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
The SEC Division of Corporate Finance recently issued a no-action letter to Pocketful of Quarters, confirming that the Division will not recommend any enforcement action if the company sells its blockchain-based tokens...more
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
When assessing whether a digital asset is a security, the key question to ask is whether a third party is driving the expectation of a return, says a senior Securities and Exchange Commission (SEC) official....more
Commission’s action shows the limited utility of the utility token-security token distinction. Regulator finds that sellers of blockchain-based digital coins cannot dodge securities law by calling the coins “utility...more
On July 25, 2017, the U.S. Securities and Exchange Commission (the “SEC”) published an investigative report (the “Report”) cautioning market participants that the offer and sale of digital assets such as “coins” or “tokens,”...more
What Is an ICO? An ICO, or initial coin offering, is the sale of virtual coins or tokens, often as a means of capital raising by startup companies that are involved in blockchain technology. Depending on the terms of the...more