The Biden Administration’s cryptocurrency policy has taken shape over the past 3+ years amidst significant market developments and wide-ranging perceptions of the Administration’s motives and intentions for the industry. While Biden’s election in November 2020 engendered hopes of both regulatory clarity and potential industry growth for some industry experts, the narrative has taken a stark
Crypto Law and Disputes
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Security Today, Non-Security Tomorrow: Have Recent Crypto Decisions Under the Howey Test Created Unworkable Standards?
By Eric Rosen
Judge Torres’s summary judgment opinion in the SEC v. Ripple (S.D.N.Y. July 13, 2023) litigation was a detailed, carefully reasoned analysis under SCOTUS’s 77-year-old Howey test. But subsequent decisions—including Judge Torres’s subsequent October 3, 2023 order denying leave for interlocutory appeal—reveal that the Ripple decision may prove untenable or otherwise lead to absurd results.
Applying…
New Crypto Tax Rules: Dynamis Quick Take
By Eric Rosen
I. Introduction
In November of 2021, Congress passed the Infrastructure Investment and Jobs Act, which amended cryptocurrency tax reporting obligations under 26 U.S.C. § 6045. This amendment began to apply “January 1, 2023”, meaning the tax reporting obligations take effect this tax year (unfortunately). 26 U.S.C. § 6045(g)(3)(C)(ii). There is no precedent for this…
Crypto Terminology Cheat Sheet
By Eric Rosen
- Decentralized Finance (DeFi): The overall ecosystem of crypto-currency and blockchain. DeFi is a response to issues with centralized financial exchanges (banks, brokerages, etc.) and uses the new technologies of crypto and blockchain to remove third party intermediaries. It allows for direct peer-to-peer financial transactions.
- Crypto-Currency: Virtual currency that can be exchanged or transmitted on the
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Is It Time to Re-Assess Whether the Term “Investment Contract” in the Securities Act and Exchange Act is Unconstitutionally Vague?
I. Introduction
For years, courts viewed the “Howey” test as clear guidance as to whether a particular asset or investment was a security. Now, recent inconsistent decisions, particularly in the crypto space, have questioned that clear guidance. The effect is a rekindling the debate as to whether the term “investment contract” is void for vagueness…
28 U.S.C. § 1782 Could Be a Powerful Tool for International Crypto Litigation
I. Introduction
28 U.S.C. § 1782 permits foreign litigants to obtain discovery in the United States in aid of foreign litigation. In the age of crypto litigation—arising from business disputes, scams, and/or fraud—litigants abroad could use Section 1782 as a means to trace crypto assets moving globally between crypto exchanges and wallets. Foreign litigants could also…
Decrypting The Proposed Digital Asset Anti-Money Laundering Act of 2023
By Eric Rosen
I. Introduction
In the rapidly evolving and novel world of cryptocurrency, legal and regulatory developments have the potential to shape the trajectory of the industry just as much as companies and consumers, if not more. The proposed Digital Asset Anti-Money Laundering Act of 2023, in particular, appears capable of ushering in significant changes in…
5 Crypto Decisions From 2023 Every Lawyer Should Know
By Eric Rosen
5 Under the Radar Crypto Decisions from 2023: What You Need to Know
2023 was a big year for crypto litigation. SEC cases against Ripple and Coinbase dominated the headlines. But, a number of other decisions (some known, some not known) have the potential to shape this growing area of law. See below our list…
The Electronic Fund Transfer Act (“EFTA”) and Crypto
I. Introduction
It is unclear whether and to what extent the Electronic Fund Transfer Act (“EFTA”)—which dictates rights and liabilities as to unauthorized electronic fund transfers—applies to cryptoassets and crypto transactions. The answer depends on future interpretations of various terms in the EFTA’s statutory text. If crypto assets are “funds” held in “accounts” established for…