The gloves are off. The SEC’s recent enforcement actions against leading crypto exchanges suggest that the SEC has decided that time’s up for the crypto industry as it currently exists in the United States....more
The organizers of an initial coin offering (ICO) recently won dismissal of an investor’s fraud claims by establishing that their public risk disclosures negated the investor’s claims of reliance on alleged misstatements. The...more
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
The U.S. Securities and Exchange Commission (“SEC”) entered an order on Dec. 15, 2020 with Wireline, Inc., related to the company’s unregistered offering of securities using a simple agreement for future tokens (“SAFT”). ...more
On October 21, 2020, the United States District Court for the Southern District of New York entered a final judgment on consent against Kik Interactive Inc. to resolve the Securities and Exchange Commission’s charges that...more
Federal court grants summary judgment to the SEC on its claim that sales of digital tokens constitute investment contracts under the Securities Act. On September 30, 2020, U.S. District Judge Alvin Hellerstein granted...more
On September 30, 2020, Judge Alvin Hellerstein, of the Southern District of New York (“SDNY”) granted summary judgment to the Securities and Exchange Commission (“SEC”) in its enforcement action against Kik Interactive Inc....more
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
Bankruptcy courts may provide relief to debtors by discharging pre-petition obligations to repay existing debts owed to creditors, and claims by equity holders. Creditors who hold debt and investors who hold equity interests,...more
The final act in the saga between Telegram Group Inc. (“Telegram”) and the SEC was the June 26, 2020 court approval of the SEC’s settlement with Telegram, in which Telegram agreed to pay a civil penalty of $18.5 million and...more
Simple Agreements for Future Tokens pose difficult and controversial legal questions under U.S. securities, commodities and tax laws. SAFT holders face significant difficulties in securing liquidity, and regulatory issues...more
After an extended fight with the U.S. Securities and Exchange Commission ("SEC"), Telegram has agreed to resolve charges the company's unregistered offering of digital tokens called "Grams" violated the United States federal...more
Like Butch Cassidy and the Sundance Kid gloriously diving off a cliff, Telegram is about to take the fall and is trying to take the SEC with it. However, Telegram and supporters are making a number of important arguments in...more
Judge P. Kevin Castel of the Southern District of New York struck his gavel and hung up on Telegram’s contentious $1.7 billion initial coin offering (“ICO”). Judge Castel ruled Telegram's planned distribution of Grams...more
It began as an obscure experiment in unregulated virtual currency. Initially undistinguished from Bitcoin, blockchain evolved to become one of the pillars of web 3.0, enabling new means of trust, transparency, security and...more
When is a digital asset a security or a commodity? Are SAFTs safe? Does hyping blockchain create an expectation of profit? Is blockchain a trademark, trade secret or neither? Are free tokens tax-free? Who is Satoshi Nakamoto?...more
The battle in federal court between the SEC and Telegram continues to progress at breakneck speed. The SEC commenced its action less than four months ago, on October 11, 2019, by seeking a temporary restraining order against...more
Digital assets and Blockchain technologies which were once described as the tools of criminals, are now a key part of efforts by traditional financial services firms to transform their businesses and innovative firms looking...more
A Complaint filed by the SEC in the Southern District of New York last week reminds us that in the area of securities law violations there is not much new under the sun. Even though the action against Eran Eyal and...more
U.S. Developments - Telegram Submits Answer to SEC Complaint Regarding TON Blockchain Network - On November 12, Telegram Group Inc. (Telegram) submitted its answer and affirmative defenses to a complaint filed against...more
On October 11, 2019, the Securities and Exchange Commission (the “Commission”) announced it filed a complaint and obtained a temporary restraining order against Telegram Group Inc. and its wholly-owned subsidiary TON Issuer...more
In this issue of The Distributed Ledger, we discuss the IRS' warning letters for over 10,000 cryptocurrency holders, the SEC's settlement with a blockchain company regarding unregistered ICO transactions, and a European...more
Token pre-sale agreements are a popular type of financing instrument among start-ups in the blockchain space. Latham & Watkins attorneys explore the initial impact of SEC v. Kik on the use of token pre-sale agreements and...more