ARTICLE
22 August 2019

ICO Enforcement Actions Continue Amid Tax Bill, Senate Hearing and UN Report

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BakerHostetler
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Recognized as one of the top firms for client service, BakerHostetler is a leading national law firm that helps clients around the world address their most complex and critical business and regulatory issues. With five core national practice groups — Business, Labor and Employment, Intellectual Property, Litigation, and Tax — the firm has more than 970 lawyers located in 14 offices coast to coast. BakerHostetler is widely regarded as having one of the country’s top 10 tax practices, a nationally recognized litigation practice, an award-winning data privacy practice and an industry-leading business practice. The firm is also recognized internationally for its groundbreaking work recovering more than $13 billion in the Madoff Recovery Initiative, representing the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC. Visit bakerlaw.com
Earlier this week, cease and desist orders were issued against two online investment entities, Zoptax LLC and Unocall, as part of an ongoing effort coordinated by the North American
United States Technology
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Earlier this week, cease and desist orders were issued against two online investment entities, Zoptax LLC and Unocall, as part of an ongoing effort coordinated by the North American Securities Administrators Association (NASAA), a task force comprised of North American state and country officials working together to stop fraudulent initial coin offerings (ICOs) and cryptocurrency-related investment schemes. NASAA was organized in April 2018. Since January, its members have initiated over 130 investigations into ICOs and similar products, and completed 35 enforcement actions.

Also this week, Kik Interactive Inc. (Kik), a defendant in an ICO-related enforcement action initiated by the U.S. Securities and Exchange Commission (SEC), denied conducting an unregistered securities offering. Kik stated in its filed response that the SEC "twisted the facts" in its complaint. The SEC began the action in June, asserting that Kik's sale of Kin, Kik's digital token, constituted the sale of unregistered securities. Kik sold $100 million worth of Kin in 2017; $55 million was purchased by U.S. investors.

In late July, a bill aimed at alleviating cryptocurrency investors' tax burden was reintroduced by U.S. Congressman Tom Emmer. The bill would ensure that the exchange of one cryptocurrency for another would be treated the same way as like-kind exchanges of real property. The bill would also provide a safe harbor related to blockchain forking events. On July 30, the U.S. Senate Committee on Banking, Housing and Urban Affairs held a hearing on regulatory frameworks for cryptocurrencies and blockchain. The Congressional Research Service published its prepared testimony for the hearing, which stressed the need for harmonization of global cryptocurrency regulations. Also this week, the United Nations issued a report finding that North Korea has generated $2 billion through cyberattacks targeting banks and cryptocurrency exchanges. The proceeds are reportedly being used to fund the country's weapons program.

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ARTICLE
22 August 2019

ICO Enforcement Actions Continue Amid Tax Bill, Senate Hearing and UN Report

United States Technology
Contributor
BakerHostetler logo
Recognized as one of the top firms for client service, BakerHostetler is a leading national law firm that helps clients around the world address their most complex and critical business and regulatory issues. With five core national practice groups — Business, Labor and Employment, Intellectual Property, Litigation, and Tax — the firm has more than 970 lawyers located in 14 offices coast to coast. BakerHostetler is widely regarded as having one of the country’s top 10 tax practices, a nationally recognized litigation practice, an award-winning data privacy practice and an industry-leading business practice. The firm is also recognized internationally for its groundbreaking work recovering more than $13 billion in the Madoff Recovery Initiative, representing the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC. Visit bakerlaw.com
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