Law
Chinese court invalidates 2019 car sale made using now worthless crypto token
Last week, a WeChat post published by the Shanghai Fengxian Court began circulating in crypto circles with regards to its recent ruling on a car sale in May 2019 made using digital currency. At the time, the buyer, identified only as Mr. Huang, signed a sales contract to purchase a 2019 Audi AL6 for CNY 409,800 ($59.477) in exchange for the consideration of 1,281 Unihash (UNIH) tokens with an undisclosed car dealership in Shanghai. Per the original contract, the seller was to deliver the car to Huang within three months’ time. According to the Shanghai Fengxian Court, Mr. Huang paid 1,281 UNIH on the date of the contract signing but did not receive the car within the specified duration nor afterwards. As a result, Mr. Huang took the seller to court, demanding the delivery of the vehi...
Elusive Bitcoin ETF: Hester Perice criticizes lack of legal clarity for crypto
The crypto sector may be maturing, but regulatory clarity around the treatment of digital assets continues to remain cumbersome. This was recently highlighted by Commissioner Hester Peirce — also known as the United States Securities and Exchange Commission’s (SEC) “crypto mom” — in remarks she made at “The Regulatory Transparency Project Conference on Regulating the New Crypto Ecosystem: Necessary Regulation or Crippling Future Innovation?” Peirce began her speech by emphasizing the importance of “regulating the new crypto ecosystem.” While this may be, Peirce also noted that the crypto industry is still in search of an actual regulator. She said: “A bipartisan bill announced last week attempts to answer that question. Some people in the crypto industry are celebrating the all...
Regulations and exchange delistings put future of private cryptocurrencies in doubt
The core principles of cryptocurrency were based on financial independence, decentralization and anonymity. With regulations being the key to mass adoption, however, the privacy aspect of the crypto market seems to be in jeopardy. In 2022, even though no particular country has come up with a universal regulatory outline that governs the whole crypto market, most countries have introduced some form of legislation to govern a few aspects of the crypto market such as trading and financial services. While different countries have set different rules and regulations in accordance with their existing financial laws, a common theme has been the strict implementation of Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. A majority of crypto exchanges operating with a license obt...
EU commissioner reiterates need for ‘regulating all crypto-assets’
Mairead McGuinness, the Commissioner for Financial Services, Financial Stability and Capital Markets Union at the European Commission, is moving forward with a discussion on regulating cryptocurrencies amid three major events in the space. In written remarks for a speech in Brussels on Tuesday, McGuinness said the Celsius Network’s recent suspension of withdrawals, as well as the crash of Terra (originally LUNA, now LUNA Classic, or LUNC), show the need for crypto-asset regulation in the European Union. She added that ongoing concerns about crypto potentially being used to circumvent sanctions on Russia were also a factor. “Regulating all crypto-assets — whether they’re unbacked crypto-assets or so-called “stablecoins — and crypto-asset service providers is necessary...
DeFi pulls the curtain on financial magic, says EU Blockchain Observatory expert
As decentralized finance continues its victorious march — although the road is sometimes bumpy — some significant questions on its nature remain. How can DeFi applications be protected from becoming nonoperational under extreme stress? Is it really decentralized if some individuals have way more governance tokens than others? Does the anonymous culture compromise its transparency? A recent report from the EU Blockchain Observatory and Forum elaborates on these questions and many others around DeFi. It contains eight sections and covers a range of topics, from the fundamental definition of DeFi to its technical, financial and procedural risks. Conducted by an international team of researchers, the report formulates some important conclusions that will hopefully make their way to the eyes an...
Anonymous hacker served with restraining order via NFT
Law firms Holland & Knight and Bluestone have served a defendant in a hacking case with a temporary restraining order through a nonfungible token, marking the first known legal process to be facilitated by an NFT. The so-called “service token” or “service NFT” was served to an unnamed defendant in a hacking case involving LCX, a Liechtenstein-based cryptocurrency exchange that was hacked in January for almost $8 million. As Cointelegraph reported at the time, the attack compromised the platform’s hot wallets, resulting in the loss of Ether (ETH), USD Coin (USDC) and other cryptocurrencies. Holland & Knight has become the first law firm to serve a defendant by #NFT, which was created and airdropped by our #AssetRecovery Team. Learn more from our client @LCX. https://t.co/wWs2cOVVY1 ...
Information, AML/CFT steps are key to fighting international digital crime, DOJ report says
The United States Department of Justice (DOJ) released a report on international law enforcement related to digital assets Tuesday. It is the first of the approximately one dozen reports mandated in President Joe Biden’s March 9 executive order “Ensuring Responsible Development of Digital Assets.” The report, titled “How To Strengthen International Law Enforcement Cooperation For Detecting, Investigating, And Prosecuting Criminal Activity Related To Digital Assets,” was written with the collaboration of Departments of State, Treasury and Homeland Security, as well as the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). Countries have varying degrees of capacity to deal with criminal activity due to the unique law enforcement challenges associated wi...
A life after crime: What happens to crypto seized in criminal investigations?
Earlier this year, during the annual Queen’s Speech in the United Kingdom, Prince Charles informed the Parliament about two bills. One of them — the Economic Crime and Corporate Transparency Bill — would expand the government’s powers to seize and recover crypto assets. Meanwhile, the United States Internal Revenue Service (IRS) seized more than $3 billion worth of crypto in 2021. As digital currencies’ monetary stock grows and enforcers’ scrutiny over the maturing industry tightens, the amount of seized funds will inevitably increase. But where do these funds go, assuming they aren’t returned to the victims of scams and fraud? Are there auctions, like there are for forfeited property? Or are these coins destined to be stored on some kind of special wallet, which might end up as a perfect ...
Enforcement and adoption: What do UK’s recent regulatory aims for crypto mean?
In April, the United Kingdom’s Economic and Finance Ministry, also known as Her Majesty’s Treasury, announced its intention to put the United Kingdom at the forefront of technology by bringing stablecoins under the country’s payments regulation — a bold move that looks especially intriguing in contrast to the recent shock, caused by TerraUSD’s (UST) depegging. Later, in May, during the annual Queen’s Speech, Prince Charles informed the Parliament about two bills that will support “the safe adoption of cryptocurrencies” and “create powers to more quickly and easily seize and recover crypto assets.” Taken together, these initiatives give an impression of the nation’s growing interest in digital assets, which comes as no surprise, given the inevitable competition for innovation with the Europ...
FCA will ‘absolutely’ consider recent stablecoin depegging when drafting crypto rules: Report
Sarah Pritchard, the executive director of markets at the United Kingdom’s Financial Conduct Authority, or FCA, reportedly said the regulator will look at the recent volatility in the crypto markets when creating rules for the space in 2022. According to a Friday Bloomberg report, Pritchard said the financial regulator will “absolutely” take into account stablecoins like TerraUSD (UST) and Tether (USDT) depegging from the U.S. dollar in drafting regulatory guidelines with Her Majesty’s Treasury for release later this year. While the USDT price only briefly dropped to $0.97 on May 12, UST’s has fallen more than 93% since May 9 to reach roughly $0.06 at the time of publication. “It really shows at front of mind the really significant issues that exist here, both in terms of a well-func...
Panama’s president says he won’t sign crypto bill into law ’at this moment’
Laurentino Cortizo, the president of Panama, has said he won’t sign off on a crypto bill recently approved by the country’s National Assembly without additional Anti-Money Laundering rules. Speaking at the Bloomberg New Economy Gateway Latin America conference on Wednesday, Cortizo said the bill recently passed by Panama’s legislature must go through legal checks before reaching his desk, but added he needed more information before potentially signing it into law. Describing the legislation as an “innovative law” and a “good law,” the president said he approved of certain aspects of the bill but hinted at possible illicit uses of cryptocurrencies that needed to be addressed. “I will not sign that law at this moment,” said Cortizo. “If the law has clauses related to money laundering activit...
Crypto users react to Terraform Labs legal team purportedly leaving company
The ongoing saga with Terraform Labs, the blockchain developer behind Terra (LUNA), took a turn following a supposed change in employment status for many on the firm’s legal team. According to their LinkedIn profiles, Terraform Labs general counsel Marc Goldich, chief litigation and regulatory counsel Noah Axler and chief corporate counsel Lawrence Florio have all stopped working for the blockchain firm as of May 2022. Goldich started at Terraform Labs in August 2021 while Axler and Florio joined in January 2022. The change in employment status for three members of Terraform Labs’ legal team followed major volatility in the crypto market after the price of LUNA collapsed to $0.00 within two weeks. Stablecoins including Tether (USDT) depegged from the U.S. dollar, while the price of TerraUS...
