On May 3, 2023, New York Attorney General Letitia James introduced legislation that, if passed, would substantially increase oversight and regulation of the cryptocurrency industry in New York. James touts the bill as the “Crypto Regulation Protection, Transparency and Oversight Act,” also to be known as the “CRPTO Act.” (the “Bill”).Continue Reading NYAG Bill Seeks to “Bring Order” to Crypto Industry
The Securities Exchange Commission (“SEC” or “Commission”) has taken action against Genesis Global Capital, LLC (“Genesis”) and Gemini Trust Company, LLC (“Gemini”) (collectively, “Defendants”) in a recently-filed complaint alleging that the crypto companies violated federal securities laws by engaging in the unregistered offer and sale of securities in the form of their “Gemini Earn Agreements.” In doing so, the Commission not only relied upon the mainstay Howey Test for determining whether an agreement is a security, but also summoned Howey’s lesser-known cousin, the Reves Test, notably leading with the latter in its complaint.Continue Reading SEC Showcases Lesser-Known Legal Theory in Crypto Lending Suit
On September 26, 2022, New York Attorney General Letitia James (the “NYAG”) took definitive action in the wake of her warning last year that crypto lending platforms must register with her office or face legal action, filing a complaint against Nexo Inc. and Nexo Capital, Inc. (collectively “Nexo”) alleging that Nexo violated New York’s Martin Act and Executive Law by acting as an unregistered securities and/or commodities broker-dealer within the state. Specifically, the complaint alleges that Nexo improperly offered and sold securities and commodities by allowing users to purchase, sell, deposit, trade, borrow against, and earn interest on virtual currency, while unregistered. The complaint further alleges that Nexo made various misrepresentations regarding its operations. The NYAG seeks an injunction, disgorgement, restitution, and a permanent bar prohibiting Nexo from purchasing or selling securities or commodities in New York.
Continue Reading NYAG Delivers on Promise to Rein In Unregistered Crypto Lending with New Suit