Thursday, June 21, 2018

Bitcoin Could Bring the Internet to a Halt

Don't bet on bitcoin ever replacing the dollar or other traditional currencies as everyday money.

That's one of the messages from a new report by an organization that represents dozens of the world's central banks.
The group, Switzerland-based Bank for International Settlements (BIS), said the "intense interest" in bitcoin and other cryptocurrencies had prompted it to look "beyond the hype" at what use they could actually contribute to the economy.
The report's authors were unimpressed, detailing a range of problems with trying to adopt cryptocurrencies as a widely used form of money.
They include the danger that just processing all the payments "could bring the internet to a halt," said the report, which was published Sunday.
More at CNN Money

Wednesday, June 20, 2018

The SEC Says Ethereum Tokens Are Not Securities


The SEC has announced that it is not considering Ethereum and its digital coin ether as securities.The SEC has declared that Ethereum and its digital coin ether, are not securities The announcement led the price of ether to rise by over 8 percent, hitting a high of $520 per token.

William Hinman, director of the division of corporation finance at the SEC, explained at the summit: “Based on my understanding of the present state of ether, the Ethereum network and its decentralized structure, current offers and sales of ether are not securities transactions.”

Hinman also hints that other cryptocurrencies, or altcoins, might one day no longer need securities regulation. He says, “Over time, there may be other sufficiently decentralized networks and systems where regulating the tokens or coins that function on them as securities may not be required.”

In the past, the SEC has considered some digital tokens as securities, particularly tokens distributed through an initial coin offering. Last July, DAO tokens were found to be securitiesafter an investigation, according to a public SEC report. Therefore, they were subject to federal securities laws and the issuers had to register all sales of DAO tokens with the SEC. The report cautioned investors against initial coin offerings, which can also violate securities law. Months later, SEC chairman Jay Clayton clarified that “every ICO I’ve seen is a security,” and many were illegal.

Read more from The Verge here.

Tuesday, June 19, 2018

Senate Democrats call for investigation of SEC's Piwowar

Commissioner Michael Piwowar is under fire for speculation that he abused his position by trying to influence Citigroup's business dealings.

Six Democrat senators asked the SEC's inspector general Wednesday to investigate whether outgoing Commissioner Michael Piwowar might have abused his position "in an attempt to unduly influence Citigroup" over its decision to limit business with gun firms.

In the letter to Carl Hoecker, inspector general of the Securities and Exchange Commission, the senators questioned reports that, during an April 24 meeting with Citigroup Inc. officials to discuss derivatives rulemaking being considered at the SEC, Mr. Piwowar tried to get the officials to reverse their gun policy because it "conflicts with his personal and political views."Mr. Piwowar is one of three Republicans on the commission, including Chairman Jay Clayton. He is leaving July 7.
Democratic senators are questioning Piwowar's attempts to have Citigroup's officials reverse their policies regarding businesses with gun firms. The senators stand firm that individual personal and political views should not affect the SEC.

Read more here from Investment News.

Sunday, June 17, 2018

SEC CorpFin Director's Big Crypto Speech

SEC Division of Corporate Finance Director William Hinman’s detailed his thoughts on ICOs at the Yahoo Finance All Markets Summit in San Francisco.

He stated that ether is not considered a security, and touched upon the fact that just because a digital asset started as a security, that does not mean it can't evolve into something else. He stressed that the quality of an asset and the manner in which it is sold affect its regulation.

Although these statements are by no means official rulings from the SEC, they are sure to carry a lot of weight with market professionals.

Get further details of Hinman's remarks here.

Friday, May 25, 2018

DOJ Opens Criminal Investigation into Bitcoin Price Manipulation

The US Justice Department has launched an investigation into traders who are manipulating bitcoin prices.

The Bloomberg report states that the probe is focused on "spoofing" - a practice where an investor intentionally manipulates the price of an instrument. Eradicating the flood of fake orders from the market is also on the agenda.

With the fall of bitcoin prices, and the volatile nature of the cryptocurrency market, there is a call to crack down on fraudulent activity. For more information, head to this CNBC article.

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Cryptocurrency losses? The attorneys at Sallah Astarita & Cox include experienced former SEC staff attorneys, and securities attorneys with decades of experience in securities manipulation cases. For a confidential review of your investments, call 212-509-6544 or email mja@sallahlaw.com.

Fed Probe Rattles Bitcoin Market

Investors should be aware that the government is cracking down on the bitcoin market.

The Justice Department has started an investigation into manipulated bitcoin prices, as well as other digital coins. In conjunction with the Commodity Futures Trading Commission, the investigation will intensify the scrutiny that's been apparent in this market for months.

Once the investigation was launched, bitcoin prices started to fall. Although they have since rebounded, it's clear that traders are sensing a negative impact on the market. Since digital coins can't be easily regulated, some question the investigation- but regulators insist the long-term benefits of the added surveillance will be worth it.

Get the full story from Barrons.

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If you have lost money in a bitcoin or any other investment, give the attorneys at Sallah Astarita & Cox a call for a confidential review of your investment. You can reach them at 212-509-6544 or by email at mja@sallahlaw.com.


‘Operation Cryptosweep’ Launched

An effort to investigate cryptocurrency investment products continues to make headlines.

The North American Securities Administrators Association (NASAA) is coordinating with US and Canadian regulators to weed out fake ICOs and other crypto scams, with as many as 70 investigations already underway.

The Washington Post reports that it's the largest movement of its kind, with 50% of investigations pending or completed, and more on the way. Nicknamed "Operation Cryptosweep", it has the approval of Head of the US Securities and Exchange Commission, Jay Clayton, who applauds lawmakers for cracking down on fraud in the ICO markets.

Read his statement, and more information about the effort, in this Finance Magnates article.

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If you are concerned about losses in cryptocurrency, give Sallah Astarita & Cox a call at 212-509-6544 or email mja@sallahlaw.com

Thursday, May 24, 2018

SEC First Cybersecurity Suit

Earlier this year, the SEC released its Interpretive Statement and Guidance on Public Company Cybersecurity Disclosures (“Guidance”). 

The SEC then sued Yahoo! alleging that Yahoo! had delayed disclosing a massive breach of its user database, which was disclosed only when Yahoo! was selling its operating business to Verizon. 

The enforcement proceeding resulted in a $35 million fine.

Law.com presents an analysis of the decision here.

Wednesday, May 23, 2018

SEC News - Fraud, Manipulation, and a Financing Scam

SEC Charges Three Former Healthcare Executives With Fraud
Fraud charges have been announced against three former Constellation Healthcare Technologies Inc. executives who falsified financial and other information they provided to a private firm in the course of negotiating the private firm’s acquisition of a majority stake in Constellation. Houston-based Constellation filed for bankruptcy in March, a little more than a year after the January 2017 acquisition.

Owner of Alternative Investment Firm Charged in Belize Airport Financing Scam
The owner of a Manhattan-based alternative investment firm has been charged with misappropriating close to $6 million in investor funds earmarked to finance the construction of an international airport in Belize.

Brokerage Firms and AML Officer Charged With Anti-Money Laundering Violations
The SEC announced settled charges against broker-dealers Chardan Capital Markets LLC and Industrial and Commercial Bank of China Financial Services LLC (ICBCFS) for failing to report suspicious sales of billions of penny stock shares.

SEC Files Charges in International Manipulation Scheme
The SEC charged four individuals for their roles in a fraudulent scheme that generated nearly $34 million from unlawful stock sales and caused significant harm to retail investors.


The attorneys at Sallah Astarita & Cox include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including the defense of enforcement actions. We represent investors, financial professionals and investment firms, nationwide. For more information call 212-509-6544 or send an email to mja@sallahlaw.com.