Virtual Currency Blog
On January 31, 2017, attorney Jeffrey A. Wertkin was arrested at a Hilton Garden Inn in Cupertino, California for attempting to sell a sealed court document in exchange for Bitcoin.
In the wake of the collapse of cryptocurrency exchange, Cryptsy, due to its founder’s fraud, investors are now targeting Coinbase as a supposed aider and abettor of that fraud.
An Initial Coin Offering has become a popular way for virtual currency entrepreneurs to raise funds for a new project or concept. Anyone with internet access can create and/or invest in an ICO in just a few steps. This type of venture capital model, a hybrid between initial public offerings and crowdfunding, has been used to finance many virtual currency projects. However, as state and federal regulators have not enacted disclosure regulations that are specific to ICOs, there is little protection for investors. In order to maintain investor confidence, ICO issuers must proactively self-regulate and engage in responsible disclosure practices until a regulatory framework is in place.
A Federal Court recently approved an IRS John Doe Summons that requires Coinbase to identify all of its US account holders and provide substantial personal and transactional information concerning those users. Berns Weiss LLP’s managing partner is seeking to intervene in the government’s proceeding to protect the rights of Coinbase’s users (and by extension all virtual currency users) from this overbroad Summons that the IRS appears to have issued in bad faith.
Purely Digital Currency Transactions Would Not Fall Within Scope of Illinois’ Transmitters of Money Act According to the State’s Proposed Guidelines for Digital Currency Regulation
The Illinois Department of Financial and Professional Regulation has released proposed Digital Currency Regulatory Guidance (“Guidance”), which “expresses the Department’s interpretation of Illinois’ Transmitters of Money Act (“TOMA”) and its application to various activities involving digital currencies.”
The Uniform Law Commission recently held a committee meeting to continue its drafting of the Virtual Currency Business Act. Berns Weiss LLP had the opportunity to speak with committee member Sarah Jane Hughes following the meeting. Ms. Hughes highlighted some of the key issues discussed at the meeting: provisional registration commonly referred to as on-ramps, defining virtual currency, and virtual currency trusts.
SEC Fintech Forum Addresses Blockchain Technology’s Impact on Financial Services Industry and Hurdles to Mainstream Adoption
On November 14, 2016, the Securities Exchange Commission hosted a Fintech Forum to discuss technological innovations across the financial services industry. The Impact of Recent Innovation on Trading, Settlement, and Clearance Activities panel focused on blockchain technology and its ability to transform various facets of the financial services industry.
Berns Weiss LLP recently met with Congressman Tony Cárdenas (D-California) to discuss his co-sponsorship of the bi-partisan virtual currency/blockchain technology resolution, passed by the U.S. House of Representatives on September 12, 2016. It represents the first formal acknowledgement by the U.S. Congress of the need to regulate this developing technology.