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Cryptocurrency Regulation: Recent Developments

In Blockchain, Crytpocurrency by Jason Freeman and Jason CarrLeave a Comment

Regulators are actively taking a role in the development of virtual currency-related markets and products. Earlier this month, for example, the Securities and Exchange Commission (SEC) initiated a broad investigation into companies and professionals behind a number of recent initial coin offerings (ICOs).[1] See our prior posts on ICOs, such as here. The December 2017 launch of the first cryptocurrency futures …

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Cryptocurrency—The IRS’s Next Big Crackdown

In Bitcoin, Blockchain by Jason Freeman and Alex AillsLeave a Comment

“Nothing is certain but death and taxes”—even when it comes to cryptocurrency. [1]  That time-tested insight, traditionally attributed to Benjamin Franklin, appears poised to go head to head with the technological innovations behind the cryptocurrency movement.  Cryptocurrency, such as Bitcoin, is virtual currency that uses cryptography for security.[2] It is not issued by any central governmental authority, rendering it—theoretically at …

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Bitcoin Forensics – The Facade of Anonymity

In Bitcoin, Blockchain by Jason FreemanLeave a Comment

Bitcoin and other virtual currencies are often thought to provide anonymity, allowing parties to move funds across the globe virtually without revealing their identity.  But that’s not exactly how it works.  Contrary to popular belief, Bitcoin is not anonymous; it is pseudonymous—and there’s a difference.  All Bitcoin transactions are linked to an address on a publicly-accessible Blockchain, a ledger of all …

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Enforcement Actions: Virtual Currency Exchanges

In Blockchain, Crytpocurrency by Jason FreemanLeave a Comment

The Financial Crimes Enforcement Network (FinCEN), working with the U.S. Attorney’s Office for the Northern District of California, recently assessed a $110,003,314 civil money penalty against BTC-e a/k/a Canton Business Corporation (“BTC-e”) for willfully violating U.S. anti-money laundering (AML) laws under the Bank Secrecy Act (“BSA”).  The enforcement action relates to BTC-e’s convertible-virtual-currency-exchange operations.  And as FinCEN’s press release indicates, …

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SEC: Virtual Tokens Issued in Blockchain-Based ICO’s may be “Securities”

In Blockchain, Crytpocurrency by Jason Freeman1 Comment

The Securities & Exchange Commission (“SEC”) recently issued a Report finding that DAO Tokens—digital, Ethereum-based tokens issued to investors—should be classified as securities under the Securities Act of 1933 (“Securities Act”) and the Securities Exchange Act of 1934 (“Exchange Act”).  The Report emphasizes the risks of emerging technologies and investor interfaces when it comes to compliance with federal securities laws.  …

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Bitcoin and Beyond: The Reality of Taxing and Regulating Virtual Currency

In Bitcoin, Blockchain by Jason FreemanLeave a Comment

As published by Jason B. Freeman in Today’s CPA Magazine, available here. Bitcoin and other virtual currencies have become a growing part our modern economy.  Although their future remains a source of uncertainty—they could, after all, become anything from the future of finance, to the new “offshore banking system,” or just a defunct and failed experiment—this virtual phenomenon is a …