Taking further steps into the world of cryptocurrency, two entities of the federal government recently took legal action against BitFunder, a now-defunct Bitcoin exchange, and its founder, Jon Montroll. The Securities and Exchange Commission filed civil charges against BitFunder and Montroll, and the U.S. Attorney’s Office in Manhattan brought criminal charges of perjury and obstruction of justice against Montroll, who was arrested and taken into custody. BitFunder was an exchange that, among other things, empowered its customers to create and trade Bitcoin denominated shares of enterprises. The numerous allegations and charges against the defendants include:
Continue Reading Crypto-Crime: The SEC and DOJ Go After BitFunder and Its BitFounder

As the number and dollar volume of Initial Coin Offerings (“ICOs”) continue to increase, the SEC has taken a greater interest in this activity. As we previously reported, the SEC issued its initial ICO guidance on July 25, 2017. In this guidance it declared that depending on the facts and circumstances, an ICO offering may involve the offer and sale of securities. If that is the case, the offer and sale of virtual coins or tokens must itself be registered with the SEC, or be performed pursuant to an exemption from registration. 
Continue Reading SEC Issues Warning on Certain ICOs

The SEC has opined that, depending on the facts and circumstances of each individual ICO, the virtual coins or tokens that are offered or sold may be securities. If they are securities, the offer and sale of these virtual coins or tokens in an ICO are subject to the federal securities laws.
Continue Reading SEC Declares That Initial Coin Offerings (ICOs) May Be Securities; Finds DAO a Security