Background: Crypto Catch 22
Followers of the SEC’s efforts to regulate digital tokens will recall former SEC Corp Fin
Director William Hinman’s speech at the June 14, 2018 Yahoo Finance Conference in which he introduced the now generally accepted proposition that a digital asset could originally be deemed a security while its network is being
On December 2, the Securities and Exchange Commission filed a lawsuit against
Ripple Labs, Inc. and two of its executives alleging they offered and sold over $1.38 billion of digital asset XRP without registration or exemption in violation of Section 5 of the Securities Act of 1933, seeking disgorgement of ill-gotten gains. Ripple filed an
On October 21, 2020, the United States District Court for the Southern District of New 
York entered a final judgment on consent against Kik Interactive Inc. to resolve the Securities and Exchange Commission’s charges that Kik’s unregistered public sale of digital tokens in 2017 violated the federal securities laws. The final judgment requires Kik to
It’s not often that an SEC Commissioner quotes Bruce Springsteen – not once, but twice – in a 
speech on securities regulation. But SEC Commissioner Hester Peirce did just that in a February 6, 2020 speech in which she unveiled her novel proposal for a digital asset safe harbor. The proposal would create a three-year
On October 11, 2019, the Securities and Exchange Commission (the “Commission”) announced 
it filed a complaint and obtained a temporary restraining order against Telegram Group Inc. and its wholly-owned subsidiary TON Issuer Inc. (collectively, “Telegram”) relating to Telegram’s offering of tokens without registration in violation of the Federal securities laws. The action sends a strong
On July 10, 2019, the Securities and Exchange Commission 
declared Blockstack PBC’s offering statement “qualified”, thus allowing Blockstack to commence the distribution and sale of its Stacks Tokens under Regulation A. This is the first offering of digital tokens to be qualified by the Commission under Regulation A, a significant milestone for the blockchain industry
On November 27, 2018, the United States District Court for the Southern District of California denied the Securities and Exchange Commission’s motion for a preliminary injunction to block an initial coin offering, finding the Commission did not meet its burden of showing the digital token in question was a security. Although this appears to be
If you were looking for a safe blockchain investment and had the chance to invest in the “first licensed and regulated tokenized cryptocurrency exchange and index fund based in the U.S.” and audited by a Big 4 accounting firm, you might do it, right? One problem: turns out it’s not licensed, regulated or audited.
On
“Can a digital asset that was originally offered in a securities offering ever be later sold in a manner that does not constitute an offering of a security?”
Such was the question posed by William Hinman, Director of the Securities and Exchange Commission’s Division of Corporation Finance, in his speech at the Yahoo Finance All
Initial coin offerings so far have gone through two major phases in their brief lifespan. The initial phase flew under the regulatory radar in an explosion of deals that raised billions of dollars seemingly overnight and without either registering the offerings with the SEC or complying with an exemption from registration. The ICO atmosphere changed