There have been several investment fads and mass enthusiasms this year that have been agitating the financial markets, but amidst the froth the fizziest speculative investments on the scene are non-fungible tokens (NFTs). This new asset class uses blockchain technology to track tokens that are attached to verify the authenticity of everything from artwork to sports highlights. The boosters of these assets have mined the enthusiasm for collectibles to drive sky-rocketing asset values for NFTs. With this new type of asset attracting so much attention and activity, it arguably should come as no surprise that the backers promoting NFTs have attracted litigation as well.
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Guest Post: The Ripple Effect – Are Cryptocurrency Tokens Securities, and Why Does it Matter?
As many readers may have noted at the time, in December the SEC filed an enforcement action against Ripple Labs and two of its executives in connection with what the SEC described as the company’s unregistered offering of securities, relating to the company’s sale of digital asset units between 2013 and the time of the filing of the enforcement complaint. In the following guest post, Suresh Ellawala takes a closer look at the issues that the SEC’s enforcement action presents. Suresh is Head of Commercial Financial Lines at Price Forbes & Partners. I would like to thank Suresh for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Suresh’s article.
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Guest Post: Judge Reverses Blockvest Decision: ICOs are Securities
In a February 14, 2019 order, Southern District of California Judge Gonzalo Curiel entered an order reversing his earlier decision on the same issue and concluding that the digital tokens offered by cryptocurrency company Blockvest LLC represented “securities” within the meaning of the federal securities laws. In the following guest post, John Reed Stark, President of John Reed Stark Consulting and former Chief of the SEC’s Office of Internet Enforcement, takes a look at Judge Curiel’s ruling and what it many mean for future securities litigation involving digital currency offerings. A version of this article previously was published on Securities Docket. I would like to thank John for allowing me to publish his article as a guest post. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is John’s article.
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SEC Corporate Finance Director Provides Guidance on Digital Assets
As digital assets and cryptocurrencies have become an increasingly important part of the current financial landscape, market participants and their advisors have struggled with to answer the question whether or not the tokens and coins represent “securities” subject to the requirements of the federal securities laws. In a remarkably direct speech on June 14, 2018, SEC Director of Corporate Finance William Hinman provided some helpful guidance on the SEC’s approach to these digital assets. Among other important things in his speech, Hinman shared his view that Bitcoin and Ether are not “securities” under the U.S. securities laws. He also emphasized that all of the circumstances involving a digital asset, including in particular the way in which it was sold, will determine whether or not the asset is a security. The text of Hinman’s speech at the Yahoo Finance All Markets Summit can be found here.
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Guest Post: The First Federal Court Hearing on SEC Jurisdiction over ICOs
As cryptocurrencies and ICOs have proliferated, one very key question has been whether not the coins or tokens are securities within the meaning of the federal securities laws. Earlier this week, the first federal court hearing at which this question was discussed took place in the federal district court in Brooklyn. In the following guest post, John Reed Stark, President of John Reed Stark Consulting and former Chief of the SEC’s Office of Internet Enforcement, provides his detailed report of the court hearing as well as his perspective on the topics under discussion. A version of this article originally appeared on Cybersecurity Docket. I would like to thank John for his willingness to allow me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is John’s guest post.
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