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 raised over $1.3 billion in unregistered offerings of the digital asset known as XRP.
Utah Passes the Third State-Run “Sandbox” for Innovative Financial Products and Services
By Allen S. Li on
Utah’s governor recently signed into law H.B. 378, which created a sandbox program for companies providing “innovative financial products or services” in the state. The program, run by Utah’s Department of Commerce, requires companies to apply and meet certain requirements in order to participate in the sandbox. Importantly, H.B.…
As Bitcoin’s Price Moves Dramatically, ETF Proposals Remain at a Standstill
By Emily Chan on
On June 26, the price of bitcoin surged to a 12-month high of nearly $13,900 (up about 35% on the month) before losing more than $1,700 in a span of 15 minutes, then rebounding slightly and closing the day at around $12,800. All the while, retail and institutional investors seeking…
Two New Bitcoin ETF Proposals Pending as Cryptocurrency Markets Mature
By Emily Chan on
Two recent proposals for bitcoin exchange-traded funds (“ETFs”) are vying to become the first to receive approval from the U.S. Securities and Exchange Commission (“SEC”) – one filed by CBOE BZX Exchange, Inc. (“CBOE”) and the other by NYSE Arca, Inc. (“NYSE Arca”). The SEC has yet to approve a cryptocurrency ETF, although several applications were filed throughout 2018.
A bitcoin ETF would allow investors to easily invest in bitcoin without needing to directly buy and manage the cryptocurrency themselves, potentially ushering in additional capital and enabling a wider range of institutional investors to tap into the market.
Once the proposals are published in the Federal Register, the SEC has an initial 45 days from the date of publication to issue a decision or request an extension, with total time not to exceed 240 days.
Further SEC action and guidance with respect to ICOs and cryptocurrencies
By Louis Rambo & Trevor Dodge on
The SEC took two additional steps today in its regulation and oversight of the initial coin offering (“ICO”) and cryptocurrency markets.
In the SEC’s latest action targeting an ICO, the SEC Enforcement Division’s new Cyber Unit intervened in an attempted ICO by Munchee, Inc., an online food review service…
SEC Cyber Unit Targets PlexCoin
By Trevor Dodge on
On December 4, the SEC’s new Cyber Unit announced it obtained an emergency asset freeze to halt the initial coin offering (“ICO”) of PlexCoin. According to the SEC, the Plexcoin ICO had raised up to $15 million to date through the fraudulent sale of unregistered securities.
This is the first-ever…
Legal Ramifications of Paying Employees with Cryptocurrency
By Allan Bloom & Brett Schwab on
As cryptocurrencies surge in value and enter mainstream consciousness, an increasing number of employers may consider compensating their employees with bitcoin, ether, or other cryptocurrencies. While a cryptocurrency compensation scheme may proliferate everyday usage of these currencies and attract tech-savvy labor talent to organizations, it may also put an employer at risk of wage and hour violations, and implicate additional regulatory regimes such as the securities laws. Although lawsuits on such “crypto-compensation” issues have yet to materialize, employers should stay ahead of the curve by protecting themselves against these potential pitfalls: