On May 3, 2021, blockchain-based trading platform operator INX Ltd. announced it had completed its initial public offering of digital tokens, raising approximately $85 million in the IPO from over 7,200 institutional and retail investors. The INX IPO is the first SEC registered offering of digital tokens, and represents another major milestone for blockchain asset
initial coin offering
SEC vs. Ripple Could Make Waves in Cryptocurrency Market
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…
Proposed Three-Year Digital Token Safe Harbor May Bridge Gap to Decentralization or Functionality
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…
What to Make of SEC Leniency in Block.one ICO Settlement?
On September 30, 2019, the Securities and Exchange Commission announced that blockchain developer Block.one had agreed to pay a $24 million fine to settle charges that it had engaged in an unregistered offering of securities in violation of Section 5 of the Securities Act. The announcement set off a mini-firestorm of criticism in the crypto…
Telegram TRO Sends Strong Message to Digital Token Issuers
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…
First Qualified Regulation A Token Offering: Will “$2 Million Contribution to Crypto Industry” be Precedent Setting?
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…
First Federal Ruling Against SEC on Whether Digital Token is a Security
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…
Imitation Not Always Flattery: SEC Halts ICO that Falsely Claimed Approval by SEC and Self-Created “Blockchain Exchange Commission”
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…
“No Good Deed”: Free Tokens Issued in Airdrops, Bounty Programs Likely Violate Securities Laws
If you’re thinking of airdropping free tokens or implementing a cryptocurrency bounty program, be careful. The Securities and Exchange Commission just issued a cease and desist order (the “Order”) with respect to an initial coin offering, finding the issuance of “free” tokens through a related bounty program in exchange for online promotional services constituted an…
Can a Digital Token Evolve? Head of Corp Fin Says “Yes”, if Network Becomes Decentralized
“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…