SEC’s Heightened Enforcement on Cryptocurrency: What You Should Know and Do to Avoid Legal Risks
The U.S. Securities Exchange Commission (SEC) continues its scrutiny on cryptocurrencies. In its January 7 announcement, SEC’s Office of Enforcement Inspections and Examinations (OCIE) added fintech, including digital assets, to its annual priority list in the coming fiscal year. In line with this, the division will continue to prioritize the analysis of certain activities and products which are believed to pose risks to investors as well as the reputation of the U.S. capital markets. Examinations of these focus areas are designed to support the SEC's mission to protect investors, promote capital formation, and keep markets fair and effective.
In this LIVE Webcast, a seasoned panel of thought leaders and professionals brought together by The Knowledge Group will provide the audience with an in-depth analysis of the recent developments in SEC’s heightened enforcement on cryptocurrencies. Speakers will also present the best practices to stay compliant and avoid potential risks and pitfalls.
Key topics include:
- SEC’s Enforcement on Cryptocurrency: Trends, Developments, and Changes
- Significant Implications of OCIE’s Examination Priorities
- Risks and Challenges
- Best Practices
- Highlights from an empirical analysis of almost 7 years of SEC enforcement on cryptocurrency: significant milestones and future trends.
- Compliant ICOs: an economic analysis of the alternative mechanisms to raise capital.
- Challenges and risks beyond ICOs and the Howey test: SEC’s approach to broker-dealer custody of digital assets, Bitcoin ETFs, stablecoins, and more.
1 .SEC stance on cryptocurrencies will remain restrictive: on the one hand, the agency is determined to continue applying Howey test to ICOs; on the other hand, no regulated cryptocurrency ETFs in the foreseeable future due to the regulator’s conviction that cryptomarkets are not liquid enough and protected enough from manipulation.
2. Time separated (pre-sale/public sale) ICOs and SAFT agreements will be challenged by the SEC. Blockchain companies should explore other ways of raising funds through token offerings which include Reg A+ exemption, two-token schemes or full blown registration.
3. Reg D exemption for an ICO is not a panacea and may be challenged by the SEC.
4. SEC will maintain its broad enforcement reach in terms of (1) geography – foreign entities may be target of enforcement actions as long as they offer products to US customers; (2) type of products (for example, securities-based swaps funded by cryptocurrencies); (3) types of market participants (for instance, paid ICO promoters).
Bull Blockchain Law LLC
- The DAO Report and Beyond: discussing the legal ramifications of the SEC's seminal cryptocurrency categorization case as well as subsequent decisions (e.g., Munchee, Paragon, and Tomahawk). Companies issuing tokens should consider certain factors and actions when determining whether their token is a security.
- This will also touch on the newly released Libra Token whitepaper as well as the recent class action case filed against token issuers and exchanges.
- Security Tokens: how transfer agents, broker-dealers, and escrow services play into companies issuing security tokens in domestic and foreign jurisdictions. Discussing the type of offering as well as the economic rights tokens represent and how this dictates relationships with third party service providers.
- The SEC's take on the blockchain and cryptocurrency industry. Reflecting on interviews with SEC Commissioners, this section will give insight into some of the more progressive actions the agency has taken to foster development in the industry, e.g., FinHub, safe-harbors, etc.
Who Should Attend:
- Cryptocurrency Companies
- Securities Lawyers
- Financial Executives
- Finance Risk Management Officers
- Finance Compliance Officers
- In-House Counsel
Simona Mola conducts financial and economic analyses in complex commercial litigation and regulatory proceedings. Dr. Mola manages teams to support expert witness testimony in all stages of litigation, including deposition and trial. Across a range of corporate finance and corporate governance matters, she addresses issues that include capital formation, disclosure requirements, financial reporting, and executive compensation. In addition, Dr. Mola has expertise with economic issues involving cryptocurrency, initial coin offerings (ICOs), blockchain use cases, and token economies.
Dr. Mola has nearly two decades of experience in consulting, government, and academia. She served as assistant director and senior policy advisor in the Division of Economic and Risk Analysis (DERA) at the U.S. Securities and Exchange Commission (SEC). At DERA, she led and developed numerous economic analyses for high-profile rulemakings and policy projects related to corporate finance, disclosure requirements, capital formation, corporate governance and executive compensation, auditing, broker-dealers, and credit rating agencies.
Simona Mola conducts financial and economic analyses in complex commercial litigation and regulatory proceedings. Dr. Mola manages teams to support …
Dr. Richard is a Managing Director with FTI Consulting who brings over 23 years of experience in fixed income markets, litigation consulting, and cryptocurrencies and blockchain. Dr. Richard’s digital asset expertise includes trading practices and token price patterns on crypto exchanges, blockchain economics, initial coin offerings, and digital token valuation and performance. Dr. Richard has a thorough understanding of the evolving regulatory and enforcement framework for cryptocurrencies and digital assets in the U.S. and abroad, as well as a comprehensive perspective on the private litigation involving ICOs and digital tokens. Dr. Richard is a member of the Wall Street Blockchain Alliance and Digital Currency Council. In addition, Dr. Richard has substantial complex litigation consulting knowledge with deep practical trading and investment management experience in bonds, fixed income products, and mortgage-backed securities.
Dr. Richard is a Managing Director with FTI Consulting who brings over 23 years of experience in fixed income markets, …
Andrew is the Founding Partner of Bull Blockchain Law LLC, a Blockchain and Cryptocurrency law firm. After finding Bitcoin in 2011, Andrew wrote his thesis on the regulation of cryptocurrencies between 2013 and 2015 while getting his law and master's degrees. Andrew ran one of the first cryptocurrency mining companies in the U.S. Today, Andrew represents Blockchain and Cryptocurrency clients across many industries, and has been quoted in Forbes Magazine and other international publications. From building cryptocurrency miners to structuring compliant digital token offerings, Andrew has years of experience within many facets of the blockchain industry.
Andrew is the Founding Partner of Bull Blockchain Law LLC, a Blockchain and Cryptocurrency law firm. After finding Bitcoin in …
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Method of Presentation:
General knowledge of security laws
NY Category of CLE Credit:
Areas of Professional Practice
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About Cornerstone Research
Cornerstone Research provides economic and financial consulting and expert testimony in all phases of complex disputes and regulatory investigations. The firm has 700 staff and offices in Boston, Chicago, London, Los Angeles, New York, San Francisco, Silicon Valley, and Washington DC.
About FTI Consulting
FTI Consulting is an independent global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. Individually, each practice is a leader in its specific field, staffed with experts recognized for the depth of their knowledge and a track record of making an impact. Collectively, FTI Consulting offers a comprehensive suite of services designed to assist clients across the business cycle – from proactive risk management to the ability to respond rapidly to unexpected events and dynamic environments.
About Bull Blockchain Law LLC
Bull Blockchain Law is a leading Blockchain and Cryptocurrency law firm representing clients nationally and internationally. Comprised of lawyers with extensive blockchain technology experience, the firm's services are tailored to provide clients with clear regulatory frameworks and understandings of technology.