Bridging the Weeks by Gary DeWaal: February 4 – February 15 and February 19, 2019 (Cryptosecurities, Cryptocurrencies, Examination Priorities Redux)

Published Date: February 18, 2019

Last week, the Securities and Exchange Commission obtained a reversal of a November 2018 decision by a federal court in California that denied it a preliminary injunction against an issuer of digital tokens that the SEC claimed was involved in a fraudulent and unlawful securities offering. The court agreed after reconsideration that the challenged conduct satisfied the criteria of a securities offering and there was a reasonable likelihood of new unlawful activity if the defendants were not formally enjoined at least preliminarily. Meanwhile, a well-known Canada-based social media company and an associated foundation are publicly opposing a privately threatened SEC enforcement action that might claim they too engaged in an unlawful securities offering for their distribution of virtual tokens that the entities claim are principally intended for use as a digital currency. Separately, divisions of the Commodity Futures Trading Commission issued, for the first time, a summary of their examination priorities for this year. As a result, the following matters are covered in this week’s edition of Bridging the Weeks:

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Gary DeWaal

Gary DeWaal is currently Special Counsel with Katten Muchin Rosenman LLP in its New York office focusing on financial services regulatory matters. He provides advisory services and assists with investigations and litigation.

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Gary DeWaal
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