cryptocurrency regulation

Crypto firm bankruptcies and resulting disruption in the crypto ecosystem will continue to exacerbate liquidity and regulatory concerns in this space. Signs of contagion are evident as prices of almost every cryptocurrency type have halved in recent months.  Since all participants supporting the crypto ecosystem are at risk, managing that risk is critical.

The SEC is expanding its team policing the crypto space by adding enforcement staff to its Crypto Assets and Cyber Unit.  We previously noted that regulatory focus on new technologies in the decentralized finance space and further developments on the application of securities laws to digital assets were two of

A threshold question in many cryptocurrency inquiries is whether the digital assets qualify as securities under the federal securities laws. If so, then they are subject to a full suite of federal securities regulations. If not, they still may be subject to AML and other DOJ regulations regarding currencies, as well as the Commodity Futures Trading Commission’s (CFTC) authority to prosecute manipulation in the spot market for commodities. Without uniform legislation providing guidance on this question, regulators and courts have generally applied the Howey test to determine whether the digital assets at issue are investment contracts and therefore securities. Rulings in litigated matters this year may serve as catalysts to drive legislative action providing further guidance to the industry.