Tag: ICO

1
The SEC Expands its Enforcement Throughout the Digital Industry
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ASIC acts on Initial Coin Offerings and crypto-asset funds
3
UAE Securities and Commodities Authority to Regulate ICOs and Join Growing List of Regulators
4
One Year after the “DAO Report” Three U.S. Courts Begin to Provide Crypto-Clarity
5
Metamorphosis: Digital Assets and the U.S. Securities Laws
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ASIC updates its guidance on treatment of ICO’s
7
ASIC: Australian laws still apply to ICOs created and offered overseas
8
Japanese Regulator Holds the First Meeting of the New Study Group on Virtual Currency Exchanges
9
Federal Court to decide whether tokens issued through an ICO are securities
10
ASX Listings and Cryptocurrencies

The SEC Expands its Enforcement Throughout the Digital Industry

By Dan S. Cohen

The Securities and Exchange Commission (“SEC” or “Commission”) is ramping up its enforcement efforts in the digital asset industry, expanding its focus to include digital asset brokers and investment companies. On September 11, the Commission issued an order against a digital asset hedge fund and announced a settlement with a self-described “ICO superstore” for violating federal securities laws. The Commission fined Crypto Asset Management LP and its principal for failing to register as an investment company, among other things. According to the SEC, Crypto Asset Management, which trades digital assets exclusively, is an investment company pursuant to the Investment Company Act because it “invest[s], reinvest[s], own[s], hold[s] or trad[es] in securities.

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ASIC acts on Initial Coin Offerings and crypto-asset funds

By Jim Bulling, Edwin Tan and Felix Charlesworth

In a statement issued today, the Australian Securities and Investments Commission (ASIC) revealed that it has prevented five Initial Coin Offerings (ICOs) from raising capital and will be taking further action in respect of one completed ICO.  The ICOs have been put on hold and some will be restructured to comply with relevant laws and regulations.  ASIC has also issued a final stop order in respect of a Product Disclosure Statement (PDS) issued by Investors Exchange Limited for units in the New Dawn Fund, which proposed to invest in a range of cryptocurrency assets.

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UAE Securities and Commodities Authority to Regulate ICOs and Join Growing List of Regulators

By Jim Bulling and Edwin Tan

On 16 September 2018, the UAE Securities and Commodities Authority’s (SCA) chairman Sultan bin Saeed Al Mansouri announced that the SCA would regulate initial coin offerings (ICOs) and recognise them as securities, as well as introduce controls for trading digital tokens.  The statement reads: In light of the rapid development of the digital tokens market and the response thereto by the regulators in a number of countries worldwide towards regulating the initial coin offerings, the SCA Board of Directors has approved the SCA plan to regulate the ICOs and recognise them as securities”.

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One Year after the “DAO Report” Three U.S. Courts Begin to Provide Crypto-Clarity

By Clifford C. Histed and Nicole C. Mueller

One year ago today, the U.S. Securities and Exchange Commission (“SEC”) published the “DAO Report” which concluded that certain tokens issued in an initial coin offering (“ICO”) were securities under the Supreme Court decision SEC v. W.J. Howey Co.  The Report stated that whether an ICO is a security offering will depend on the facts and circumstances, including the economic realities of the transaction.  Confusion, private lawsuits, SEC enforcement actions, and even criminal prosecutions ensued, but three courts are about to provide clarity.

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Metamorphosis: Digital Assets and the U.S. Securities Laws

By Robert M. Crea, Anthony R.G. Nolan and Eden L. Rohrer

In the past year, the U.S Securities Exchange Commission (“SEC”) and Chairman Jay Clayton have repeatedly cautioned the cryptocurrency and initial coin offering (“ICO”) industries about the securities law implications for digital assets.  On February 6, 2018, in testimony before the Senate Banking Committee, Chairman Clayton notably asserted that “[e]very ICO I’ve seen is a security.”

However, on June 14, 2018, William Hinman, the SEC’s Director of the Division of Corporation Finance, stated that, putting aside the fundraising that accompanied the creation of Ether, “current offers and sales of Ether are not securities transactions.”  This statement was based on a novel theory of evolving decentralization that may very well have significant ramifications for cryptocurrency and ICO markets.

Please see our latest K&L Gates HUB article for a discussion about the context and implications for Director Hinman’s conclusions surrounding Ether.  It also analyses the specific factors he suggests weighing in determining whether a given digital asset is a security.

ASIC updates its guidance on treatment of ICO’s

By Jim Bulling and Felix Charlesworth

On 1 May 2018, the Australian Securities and Investments Commission (ASIC) released its revised Information Sheet 225 which provides an updated guidance on initial coin offerings (ICOs). The updated report expands its scope to include guidance dealing with other crypto-currency and digital token (Crypto-Asset) businesses.

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ASIC: Australian laws still apply to ICOs created and offered overseas

By Jim Bulling and Edwin Tan

On 26 April 2018, John Price of the Australian Securities and Investments Commission (ASIC) highlighted in a speech that Australian corporate and consumer laws might still apply to ICOs created and offered from overseas, so long as they were offered and sold to Australian consumers.  Mr Price warned that there was an incorrect perception that Australian regulations did not apply to activities engaged from overseas.

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Japanese Regulator Holds the First Meeting of the New Study Group on Virtual Currency Exchanges

By Yuki Sako

As a response to the fallout resulting from the hacking of Japanese cryptocurrency exchange Coincheck Inc., which resulted in $530 million worth of digital currencies being stolen, on April 10, 2018, the Financial Services Agency of Japan (FSA) hosted the first meeting of the Study Group on Virtual Currency Exchange Service Providers (Study Group).

By way of background, beginning April 2017, Japan required virtual currency exchange service providers (Virtual Currency Exchange(s)) to be registered with the Japanese authority.  Registered Virtual Currency Exchanges are subject to certain operational requirements and conduct regulations such as verification of customers’ identities and customer disclosure.

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Federal Court to decide whether tokens issued through an ICO are securities

By Clifford Histed

In a criminal case in Brooklyn, New York, a federal court has been asked to decide for the first time whether tokens or coins issued through an initial coin offering constitute “securities” under U.S. securities laws.

On September 29, 2017 the SEC filed a civil complaint against Maksim Zaslavskiy, alleging that he had committed securities fraud and sold “illegal unregistered securities.”  The instruments at issue were tokens that Zaslavskiy allegedly sold to the public through initial coin offerings of his companies RECoin Group Foundation LLC and DRC World, Inc.  The lawsuit followed an investigation that apparently took less than 90 days to conduct, and that involved reviewing social media and online postings.  The investigation appears to have been conducted parallel with a criminal investigation by the FBI, and a criminal complaint was filed 28 days after the SEC complaint.  The SEC case was stayed pending resolution of the criminal case.

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ASX Listings and Cryptocurrencies

By Jim Bulling and Edwin Tan

The Australian Securities Exchange (ASX) has recently provided several comments in relation to entities that are listed or looking to list on the ASX that are involved in cryptocurrency-related businesses, such as developing cryptocurrency tokens, conducting Initial Coin Offerings and operating cryptocurrency exchanges.

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