News & Analysis as of

Unregistered Securities

Chairman Clayton Asks Lawyers to Knock it Off with the Unregistered Coin Offerings

In his recent remarks at the Securities Regulation Institute, SEC Chairman Jay Clayton had some stern words for market professionals, especially lawyers, involved in initial coin offerings (ICOs). He expressed concern that...more

SEC Chair Clayton Warns Lawyers on Initial Coin Offerings

SEC Chair Clayton delivered the following remarks at a conference of securities professionals: “My first message is simple and a bit stern. Market professionals, especially gatekeepers, need to act responsibly and hold...more

BitConnect and the Advent of State Securities Enforcement Over ICOs

by Goodwin on

In the wake of the SEC’s clarifying guidance in Munchee regarding the application of the federal securities laws to initial coin offerings (“ICOs”), there has been increased activity among both federal and state regulators as...more

Regulators Continue to Scrutinize Initial Coin Offerings

by Carlton Fields on

As reported in the most recent issue of Expect Focus, the SEC issued an investigative report in July cautioning market participants that distributed ledger (blockchain) technology-based offers and sales of digital "tokens" or...more

Court Rejects SEC Request For “Obey The Law” Injunction

by Dorsey & Whitney LLP on

The statute of limitations and the decision in Kokesh v SEC, 137 S.Ct. 1635 (2017) clearly present challenges for the SEC. In that case the Court rejected the SEC’s claim that its disgorgement remedy is equitable and not...more

Business Litigation Alert: "Legal Issues to Watch in 2018"

by Porter Hedges LLP on

Last year was filled with many headline-making issues. As we begin to look at 2018, here are three issues we are closely tracking....more

The SEC and Plaintiffs’ Class Action Attorneys Are Targeting Initial Coin Offerings

by Fenwick & West LLP on

Issuers and other professionals participating in Initial Coin Offerings — widely known as ICOs — are facing the increasing threat of both U.S. Securities Exchange Commission enforcement actions and private class action suits...more

The SEC’s Shutdown of the Munchee ICO

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

SEC Takes Enforcement Action against Utility Token ICO

by Latham & Watkins LLP on

The SEC’s latest enforcement action and its Chairman’s statement clarify the application of securities laws to ICOs and cryptocurrency markets. Introduction - On December 11, 2017, the US Securities and Exchange...more

Crackdown: SEC's New Cyber Unit Targets Blockchain and ICO Abuses

by Jones Day on

The Situation: The U.S. Securities and Exchange Commission has launched a special unit to bring enforcement actions against several forms of cyber misconduct. The Result: The Cyber Unit has already brought enforcement...more

Piecing Together the SEC’s Framework for Evaluating Initial Coin Offerings

by Reed Smith on

As capital continues to flood into initial coin offerings and cryptocurrency markets, the U.S. Securities and Exchange Commission has sought to apply the existing securities laws and regulations to novel digital assets. In...more

Bridging the Week - December 2017 #3

by Katten Muchin Rosenman LLP on

Non-Registered Cryptocurrency Based on Munchee Food App Fails to Satisfy SEC’s Appetite for Non-Security: The Securities and Exchange Commission filed and simultaneously resolved an enforcement proceeding against Munchee...more

How Many Times Does the SEC Have to Repeat Itself Before the World Listens?

by Sullivan & Worcester on

SEC Halts ICO After Finding that Tokens are Securities - Remember in July of this year when the Securities and Exchange Commission (SEC) said in its Decentralized Autonomous Organization (DAO) Report that "U.S. federal...more

Regulation of Initial Coin Offerings

by White & Case LLP on

With cryptocurrencies on the rise, start-up companies increasingly pursue a novel path to raise capital: the Initial Coin Offering ("ICO"). The frequent notion that ICOs are unregulated is misleading. Regulators have been...more

Company Abandons ICO, Agrees to Cease-and-Desist; SEC Chairman Issues ICO Warning

by Farrell Fritz, P.C. on

December 11, 2017 was a day of reckoning for entrepreneurs conducting or contemplating initial coin offerings, and for securities professionals who advise them. ...more

This Week In Securities Litigation

by Dorsey & Whitney LLP on

The Commission had one win and two losses in court over the last week, one of which may have a long term impact on its cases. In a case centered on two alleged microcap manipulations the court dismissed the complaint finding...more

SEC eats away at Munchee "utility tokens": guidance for ICOs

by DLA Piper on

The SEC has issued an enforcement order regarding Munchee's token offering, and SEC Chairman Jay Clayton has released a general public statement on cryptocurrencies and ICOs. For those who previously read our alert about...more

When Does Software Become Securities?

The SEC Munchee Order and Chairman’s Statement - On December 11, 2017, the U.S Securities and Exchange Commission (“SEC”) issued a cease and desist order (“Order”) against Munchee, Inc.’s (“Munchee”) $15 million Initial...more

SEC Charges Firm Selling Digital Coins With Sale of Unregistered Securities

by Dorsey & Whitney LLP on

The creation of a unique digital coin or token such as Bitcoin, Ether or fiat currency tied to blockchain or cryptographically-secured ledger has become a controversial but expanding form of payment in some circles. Some...more

SEC Takes $15 Million Bite Out of an ICO

The SEC issued a cease and desist order against Munchee’s $15 million ICO, opining that the tokens were securities for which no there was registration statement filed or in effect with the Commission nor a qualifying...more

SEC Continues Crackdown On Initial Coin Offerings With Cease-And-Desist Order

by Fox Rothschild LLP on

The Securities and Exchange Commission announced yesterday that a California-based company selling digital tokens to investors to raise capital for its blockchain-based food review service halted its initial coin offering...more

SEC Halts Initial Coin Offering; Chair Clayton Speaks

Munchee Inc., a California-based company selling digital tokens to investors to raise capital for its blockchain-based food review service halted its initial coin offering (ICO) after being contacted by the SEC. Munchee Inc....more

SEC’s Cyber Unit Files Its First-Ever Charges To Halt Alleged Initial Coin Offering Scam

by Fox Rothschild LLP on

The Securities and Exchange Commission announced yesterday that its new Cyber Unit obtained an emergency asset freeze to halt a “fast-moving” Initial Coin Offering (ICO) fraud that raised up to $15 million from thousands of...more

Examples of the SEC’s New Focus on Retail Customers and Cyber

by Dorsey & Whitney LLP on

The Commission’s Enforcement Division under Chairman Clayton is focusing on retail investors and cyber. Two actions brought over the last two business days serve to highlight this focus, including the first brought by the new...more

SEC Files Charges in PlexCoin ICO

by Goodwin on

On December 4, 2017, the Securities and Exchange Commission (the “SEC”) announced that it has filed charges against two individuals for their roles in the initial coin offering (“ICO”) of PlexCoin Tokens. The SEC charged...more

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Cybersecurity

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