U.S. citizen Joseph Kim of Phoenix, Arizona has been fined $1.1 million and sentenced to 15 months in jail for misappropriating Bitcoin (BTC) and Litecoin (LTC) from several people, the U.S. Commodity Futures Trading Commission (CFTC) reports Friday, Nov. 9. The CFTC found out that Kim defrauded his employer, a Chicago-based proprietary trading firm, transferring approximately $601,000 worth amount of BTC and LTC to his own accounts in 2017. When asked about missing cryptocurrencies, Kim falsely claimed that security issues made him transfer digital currencies to several accounts. Shortly after, the misappropriation was discovered and Kim was fired. Kim reportedly …

U.S. international law firm Perkins Coie (PC) announced it had hired a former counsel for the country’s commodities regulator to work in its blockchain practice in a press release Nov. 6. Kari Larsen, who previously worked at the Division of Enforcement of the Commodity Futures Trading Commission (CFTC), will now be based at PC’s Blockchain Technology & Digital Currency industry group. The group originally formed in 2013, with PC keen to gain an understanding of the complex legal landscape which continues to evolve around cryptocurrency and related tokens in the U.S. “I’m confident that Kari has a true understanding of …

The U.S. Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarlo said in a speech Nov. 7, that technological advances, including Distributed Ledger Technology (DLT), could help regulators better oversee trading markets. Giancarlo delivered his speech titled “Quantitative Regulation: Effective Market Regulation in a Digital Era” at the FinTech Week conference at Georgetown University Law School. The chairman addressed emerging digital technologies, such as DLT, big data, automated data analysis, and artificial intelligence (AI), and their impact on trading markets and the financial landscape. In terms of applying these technologies to trading markets, Giancarlo said that “we begin to see a …

A new commissioner at U.S. regulator the Commodity Futures Trading Commission (CFTC) repeated called for handling fintech – including blockchain and cryptocurrency – with an “open mind” in a speech Thursday, Oct. 25. Speaking at the 2018 International Swaps and Derivatives Association (ISDA) Annual Japan Conference in Tokyo, Rostin Behnam, who has now held the post for a year, revealed he had spent much of that time focusing on issues related to disruptive fintech. “I am surprised by the amount of time I spent examining issues related to bitcoin, crypto assets, distributed ledger technology (DLT), artificial intelligence, and cloud-based programming,” …

The U.S. Securities and Exchange Commission (SEC) has published a memorandum, dated Oct. 9, from a meeting regarding the Bitcoin (BTC) exchange-traded-fund (ETF) proposal from VanEck and SolidX. As stated in the memorandum, VanEck is a New York-based investment management firm with $46 billion in assets under management and SolidX is a provider of blockchain software development and financial services. According to the document, on Oct. 9 SEC Commissioner Elad L. Roisman and his counsels Dean Conway, Matthew Estabrook, and Christina Thomas met with representatives from SolidX, VanEck, and the Chicago Board Options Exchange (CBOE). The memorandum presents a summary …

The Switzerland-based Capital Markets and Technology Association (CMTA) has published new anti-money-laundering (AML) standards for digital assets and distributed ledger technologies (DLT) Oct. 18. CMTA is a non-profit, independent association established in Geneva earlier this year with the aim of promoting the adoption of DLT, such as blockchain, and digital assets in the financial markets. Its creation was a joint initiative from online bank Swissquote, market software provider Temenos, and the country’s largest law firm Lenz & Staehelin. According to CMTA, the newly-published standards are designed to “clarify [...] measures to be taken in order to comply with the Swiss …

A New York federal court has ordered cryptocurrency hedge fund Gelfman Blueprint, Inc. (GBI) and its CEO Nicholas Gelfman to pay over $2.5 million for operating a fraudulent Ponzi scheme, according to an official announcement published Oct. 18. GBI is a New York-based corporation and denominated Bitcoin (BTC) hedge fund incorporated in 2014. As stated on the company’s website, by 2015 it had 85 customers and 2,367 BTC under management. The order is the continuation of the initial anti-fraud enforcement action filed by the U.S. Commodity Futures Trading Commission (CFTC) against GBI in September 2017. The CFTC charged GBI for …

The U.S. Commodity Futures Trading Commission (CFTC)’s Brian Quintenz has addressed the question of accountability in an era of disintermediated finance and smart contracts. The commissioner made his remarks at the 38th Annual GITEX Technology Week Conference in Dubai Tuesday, Oct. 16. Broadly, the commissioner proposed that when it comes enforcement actions, not only users, but the coders themselves may be held to account. Quintez explained: “The appropriate question is whether these code developers could reasonably foresee, at the time they created the code, that it would likely be used by U.S. persons in a manner violative of CFTC regulations." …

Former chairman of the U.S. Commodity Futures Trading Commission (CFTC), Gary Gensler said that most tokens sold through Initial Coin Offerings (ICOs) should be classified as securities, Bloomberg reported Oct. 15. Should cryptocurrencies be considered securities, they would fall under the regulatory purview of the U.S. Securities and Exchange Commission (SEC). Issuers of coins would have to comply with certain laws, register with the SEC, and disclose specific information like a description of the organization’s properties or financial statements. When asked whether blockchain technology should be regulated, Gensler asserted that “we should be technology-neutral.” He continued, stressing the necessity to …

Normally, there is very limited room for drawing legitimate comparisons between a Senate hearing and an Mixed Martial Arts (MMA) fight. Yet the hearing entitled “Exploring the Cryptocurrency and Blockchain Ecosystem,” which took place on October 11, 2018 on the US Senate’s Committee on Banking, Housing & Urban Affairs’ floor, definitely bore quite a few similarities to a hyped sporting event that had made big waves just a few days ago. Two witnesses who were brought to testify on issues and promises of crypto stood by polarising views on the subject matter, albeit they expressed these views with varying intensity. …

The U.S. Securities and Exchange Commission (SEC) has halted a planned Initial Coin Offering (ICO) that falsely claimed have SEC approval, the agency reported in an official press release Thursday, Oct. 11. The SEC suspended the ICO project with an emergency court order, and also halted pre-ICO sales by the company Blockvest LLC, and its founder Reginald Buddy Ringgold III. The complaint by the SEC alleges that Blockvest falsely claimed that their ICO and affiliates had acquired approval from major financial regulators, including the SEC itself. Blockvest and Ringgold — who also goes by the name Rasool Abdul Rahim El …

Last week, two US lawmakers introduced a bill dubbed the "Blockchain Promotional Act 2018" in the House of Representatives. Its main purpose is to establish a common definition of ‘blockchain’ technology along with a blockchain working group that would potentially overview studies for federal adoption of the technology. Here’s what the bill might mean for the US regulatory landscape, which has been (albeit significantly slowly) moving towards recognizing the industry over the past few months. What do we know about the ‘Blockchain Promotional Act 2018’? The document was introduced by two members of the House of Representatives — California democrat …