Jonathan A. Forman

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Telegram: Deconstructing One of the Biggest Blockchain Cases of 2020

The Telegram case is arguably the most important case of 2020 involving the legal classification of blockchain-based digital assets. Because it is often cost-prohibitive for companies to challenge the government in court, the Telegram litigation offered a unique opportunity for the parties to present arguments on several complex legal issues. Given the lack of judicial … Continue Reading

SEC Wins Case Against Kik and Adds Precedent for Digital Assets

On Sept. 30, the United States District Court for the Southern District of New York granted the U.S. Securities and Exchange Commission’s (SEC) motion for sum mary judgment against Kik Interactive Inc. (Kik) and denied Kik’s cross-motion for summary judgment. As we previously reported, the SEC challenged Kik’s compliance with the federal securities laws in … Continue Reading

New York Appellate Court Confirms Attorney General’s Broad Investigative Powers into the Cryptocurrency Industry

On July 9, the Appellate Division of the Supreme Court of New York, First Department (First Department) issued a significant decision in James v. iFinex that confirmed the broad authority of the New York State Attorney General (NYAG) to investigate potential fraud. The decision is significant because it is the first appellate decision to apply … Continue Reading

SEC and Kik Present Competing Arguments on Application of Securities Laws to Blockchain Tokens

On May 8, 2020, the U.S. Securities and Exchange Commission (SEC) and Kik Interactive Inc. (Kik) finished briefing their cross motions for summary judgment, which were previously filed on March 20, with opposition briefs filed on April 24. The briefing totals more than 400 pages of arguments by the parties in the SEC’s court challenge … Continue Reading

Court Applies Single Scheme Theory To Grant the SEC’s Preliminary Injunction in Telegram Cryptocurrency Case

On March 24, Judge P. Kevin Castel of the U.S. District Court for the Southern District of New York granted the Securities and Exchange Commission’s (SEC) motion for a preliminary injunction in the closely followed Telegram case. The preliminary injunction continues to prevent the delivery by Telegram Group Inc. and TON Issuer (collectively, Telegram) of … Continue Reading

New FinCEN Guidance for Cryptocurrency and Blockchain Businesses

On May 9, 2019, the Financial Crimes Enforcement Network (FinCEN) published FIN-2019-G001, which provides new guidance on the application of the Bank Secrecy Act (BSA) and FinCEN regulations to money services businesses that engage in money transmission involving convertible virtual currencies. While stating that it “does not establish any new regulatory expectations or requirements,” the … Continue Reading

Hard for ICOs to Avoid US Courts: Personal Jurisdiction Found in Two Recent Securities Cases Over Foreign ICO Defendants

Over the past year, the plaintiffs’ bar and Securities and the Exchange Commission (SEC) have brought class and enforcement action proceedings, respectively, against those involved with the issuance and marketing of initial coin offerings (ICOs), including those located outside the United States. The proceedings involving foreign defendants present the interesting and threshold issue in these … Continue Reading

Blockchain Developments: Food Supply Chain, Bitcoin ETPs, ICOs and Tech Adoption

In this issue: • Multiple Pilots Drive Momentum for Leveraging Blockchain in the Food Supply Chain • SEC Rejects Winklevoss Bitcoin Trust, Commissioner Dissents • New Reports Detail ICO Scrutiny and Seek to Provide Clarity • Blockchain Adoption Continues in Both Institutional and Startup Environments Multiple Pilots Drive Momentum for Leveraging Blockchain in the Food … Continue Reading

ICOs Avoiding US Citizens Not Immune To Lawsuits In US

Last summer, the Securities and Exchange Commission (SEC) issued its 21(a) report concluding that, according to the U.S. Supreme Court decision in SEC v. W.J. Howey Co., the DAO token qualified as a “security” under the federal securities laws and thus, its offering had to either be registered with the SEC or subject to a … Continue Reading
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