SEC Requests Comment on Bitcoin Futures ETFs

On March 23, 2018, the U.S. Securities and Exchange Commission (“SEC”) issued an order instituting proceedings to determine whether it will approve or disapprove a proposal for Bitcoin futures exchange-traded funds (“ETFs”) (the “Order”).Commenters will have until April 19, 2018 to submit comments.  Those with rebuttals to the comments will have until May 3, 2018 to submit rebuttals.

Read more on our sister blog Derivatives & Repo Report

Open Session of the U.S. Senate’s Committee on Banking, Housing and Urban Affairs Hears Joint Testimony from Heads of the SEC & CFTC

On February 6, 2018, the United States Senate Committee on Banking, Housing and Urban Affairs conducted a hearing entitled “Virtual Currencies: The Oversight Role of the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission.” Hearing. The Chairman of the U.S. Securities and Exchange Commission (SEC), Jay Clayton, and the Chairman of the U.S. Commodity Futures Trading Commission (CFTC), J. Christopher Giancarlo, provided testimony.

The hearing comes at a time when both agencies are increasingly active in the virtual currency space. Most notably, the SEC has provided extensive guidance and taken enforcement action against certain “initial coin offerings” for violations of the U.S. securities laws. Similarly, the CFTC has taken enforcement actions against fraudulent schemes, as well as overseeing the launch of Bitcoin futures contracts. For further information on these actions, please consult virtualcurrencyreport.com. The testimony from both agencies follows on public statements by both Chairmen, including most recently a joint op-ed published in the Wall Street Journal. Continue Reading

Understanding Cryptocurrencies in Asset Management Forum held in New York, materials now available

On January 18th, Perkins Coie LLP held a forum entitled Understanding Cryptocurrencies in Asset Management in its New York office.  This forum covered how cryptocurrencies and blockchain technology are affecting the asset management industry with specifics on:

  • Investing in Bitcoin futures and other crypto-derivatives
  • Emerging crypto indices
  • Overview of product development including Bitcoin ETFs and cryptocurrencies as an asset class
  • The use of Distributed Ledger Technology (DLT) in processing and trading of securities and derivatives

Speakers included Andrew Cross, Partner, Perkins Coie, Todd Zerega, Partner, Perkins Coie and Dana Syracuse, Counsel, Perkins Coie.

The presentation is now available here. For further information, please contact one of the speakers.

SEC Takes Aim at Initial Coin Offerings Again

The SEC is targeting ICOs once again, but it is now adding more focus through its new Enforcement Division Cyber Unit.

  • In its enforcement settlement with Munchee, Inc., the SEC looked past the utility of a “utility token” in its “securities” analysis and instead focused on aspects such as marketing and the existence of a secondary market for the tokens.
  • SEC Chairman Jay Clayton issued a statement reinforcing that facts matter for each token sale, but also provided a warning that when things sound “too good to be true,” they usually are.

In this update, we detail the background behind the SEC’s Munchee Order and its new Cyber Unit, share some lessons from the order and consider the implications of these renewed efforts. Read the full article on PerkinsCoie.com

CFTC Virtual Currency Proposed Interpretation – Part 2

On December 15, 2017, the U.S. Commodity Futures Trading Commission (the “CFTC”) issued a proposed interpretation of the term “actual delivery” as used in the provision of the Commodity Exchange Act (the “CEA”) that grants the CFTC explicit authority to oversee the marketplace for “retail commodity transactions.”  This is the second blog posting in a multi-part series (read Part 1 here) that will explore the regulation of retail commodity transactions and the CFTC’s recent proposed interpretation (the “Proposed Interpretation”), the issuance of which we believe represents a potentially significant milestone in the regulation of virtual currency transactions.  We continue our series with an examination of the Proposed Interpretation and its examples for what may constitute “actual delivery” of virtual currency.  Continue reading on the Derivatives & Repo Report.

Retail Commodity Transactions Involving Virtual Currencies: An Overview of the CFTC’s Proposed Interpretation (Part 1)

On December 15, 2017, the U.S. Commodity Futures Trading Commission (the “CFTC”) issued a proposed interpretation of the term “actual delivery” as used in the provision of the Commodity Exchange Act (the “CEA”) that grants the CFTC explicit authority to oversee the marketplace for “retail commodity transactions”. This is the first blog posting in a multi-part series that will explore the regulation of retail commodity transactions and the CFTC’s recent proposed interpretation (the “Proposed Interpretation”), the issuance of which we believe has represents a potentially significant milestone in the regulation of virtual currency transactions. We begin our series with a brief look at the history and background of the regulation of retail commodity transactions. Read the full “Retail Commodity Transactions Involving Virtual Currencies: An Overview of the CFTC’s Proposed Interpretation (Part 1)” post on our Derivatives & Repo Report.

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