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Many readers may have noted SEC Jay Clayton’s January 22, 2018 speech about his agency’s scrutiny of cryptocurrencies, as well as the January 24, 2018 opinion piece Clayton wrote in the Wall Street Journal along with his counterpart from the CFTC, J. Christopher Giancarlo. In both statements, Clayton made in clear that the SEC intends to hold gatekeepers to account for their activities in connection with ICOs and cryptocurrencies. 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 the SEC’s cryptocurrency related focus on gatekeeper liability. I would like to thank John for his willingness 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 John’s guest post.
Continue Reading Guest Post: Beware ICO Lawyers: As Regulatory Gatekeepers, You’re the Next SEC Target

In the recent Advisen quarterly claims webinar, when asked to make a claim prediction for 2018, I said that I thought we would see more cryptocurrency-related regulatory action, enforcement action, and litigation this year. Some might say I was not really going out on a limb with this prediction. After all, earlier this week, Jay Clayton, the Chair of the SEC, and J. Christopher Giancarlo, the head of the CFTC, took to the editorial pages of the Wall Street Journal to make the point that their respective agencies  are closely monitoring cryptocurrency activities and that the agencies will take action when warranted. That same day, the CFTC announced its third fraud enforcement action in a week.
Continue Reading As Predicted, Another Cryptocurrency-Related Securities Suit

As I have previously noted (most recently here), the SEC recently has stepped up its regulatory efforts to police the burgeoning Initial Coin Offering (ICO) market, as well as cryptocurrencies generally. Now it appears that the federal regulators are not going to be the only ones to get in on the act. U.S. state regulators have recently stepped forward to assert their concerns and their authority as well, and at least one state regulator is backing the words up with action.
Continue Reading State Securities Regulators Step Up on ICO and Cryptocurrency Enforcement

Even after the precipitous drop this past Friday in the price of Bitcoin and other digital currencies, the developments during the past several months involving cryptocurrencies have to be one of the year’s top business stories. While news articles about digital currencies focus on the dramatic rise this year in the price of Bitcoin or on the recent wave of initial coin offerings (ICOs), part of this year’s cryptocurrency story has to include the SEC’s increasingly active approach to policing digital currency trading, as well as the rising numbers of lawsuits filed against cryptocurrency sponsors. As I have noted in prior posts, in recent weeks claimants have filed a number of cryptocurrency-related securities lawsuits. Late last week, investors filed two more of these lawsuits, one involving an ICO company and the other involving a publicly traded blockchain consulting company.
Continue Reading Cryptocurrency-Related Securities Lawsuits: A Litigation Filing Trend for the New Year?

In the latest of what is beginning to look like a wave of ICO-related securities lawsuit filings, would-be investors who made pre-offering investments in Monkey Capital’s promised but uncompleted ICO have filed a securities class action lawsuit in the Southern District of Florida against the company and its principals, alleging that the company’s pre-offering sale of options to purchase coins or tokens in the offering represented the sale unregistered securities in violation of the federal securities laws. A copy of the plaintiffs’ December 19, 2017 complaint can be found here.
Continue Reading Uncompleted ICO Draws Securities Class Action Lawsuit

According to news reports, the amount raised through Initial Coin Offerings (ICOs) in 2017 now exceeds $4 billion. This surge of activity has drawn the attention of regulators. The SEC is clearly stepping up its ICO-related enforcement activity. ICOs are also drawing the attention of securities class action plaintiffs’ attorneys. As I noted in a prior post, plaintiffs’ attorneys have filed several securities class action lawsuits in connection with the Tezos ICO early this year. Now plaintiff attorneys have filed yet another ICO-related securities class action lawsuit, in this case involving the high-profile and controversial Centra Tech ICO.
Continue Reading Another ICO Draws a Securities Class Action Lawsuit

John Reed Stark

One of the most interesting and arresting business stories of 2017 has been the astonishing proliferation of initial coin offerings (ICOs), as I discussed in a prior post (here). Readers who have been watching this story develop undoubtedly are aware that things have been moving very quickly recently on the regulatory front with respect to ICOs. ICOs suddenly are facing a very different regulatory environment. 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 the recent regulatory developments and examines their implications. A version of this article originally appeared on Securities Docket. I would like to thank John for his willingness to allow me to publish his 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.
Continue Reading Guest Post: Which ICOs are Next to Get Caught up in the SEC’s ICO Dragnet?

John Reed Stark

 As I noted in a recent post (here), the business pages these days are full of headlines about Initial Coin Offerings (ICOs). Among many issues swirling around ICOs one is the question of how the offerings fit within the overall legal and regulatory framework. 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 detailed look at ICOs with a particular focus on securities regulation. A prior version of this article previously appeared on Securities Docket. I would like to thank John for his willingness to allow me to publish his article 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.
Continue Reading Guest Post: The SEC and ICOs: Winter is Coming

Anyone who reads the business pages these days has to be aware that there has been a surge of interest and activity involving cryptocurrencies, and in particular involving initial coin offerings (“ICOs”). In third quarter 2017 alone, 105 ICOs raised over $1.3 billion. This level of activity has in turn attracted regulatory scrutiny and even enforcement activity. In addition, there is now a securities class action lawsuit pending in connection with an ICO earlier this year, as discussed in detail below. As problems have emerged, investors, regulators, and others understandably have become wary of ICOs. However, because of the opportunities involved, ICOs are likely to continue, and for that reason it remains important to try to understand the promise they represent.
Continue Reading Cryptocurrencies and ICOs: Problems and Promise