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.
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Another ICO Draws a 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.
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Guest Post: Which ICOs are Next to Get Caught up in the SEC’s ICO Dragnet?
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.
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ICO Enforcement Actions Threatened, ICO Lawsuits Proliferate
According to the latest update on the Coinschedule website (here), there have been a total of 228 initial coin offerings so far this year through mid-October, raising a total of over $3.6 billion. At least five of this year’s ICOs have raised over $100 million. This burgeoning activity notwithstanding, ICOs are at the center of controversy. Among other things, China and South Korea have banned ICOs. The SEC has already shown its willingness to pursue enforcement actions against ICO sponsors, as discussed further here. And now a high-profile statement by one of the country’s leading securities regulation experts suggests even greater scrutiny may lie ahead. In the meantime, as discussed below, ICO and cryptocurrency-related litigation appears to be proliferating.
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Guest Post: The SEC and ICOs: Winter is Coming
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.
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Cryptocurrencies and ICOs: Problems and Promise
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.
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