Canada    FinTech Guide    Chapter 6    United States of America

6. Virtual Currency - Bitcoin
United States of America  United States of America

The social and political climate regarding Virtual Currency is generally favorable.

Legal Affairs

Generally, any platform that is facilitating the sale of digital assets, including digital currencies, in the United States must be concerned with possible regulation by the SEC, the CFTC, the U.S. Treasury through the Financial Crimes Enforcement Network (“FinCEN”), the U.S. Department of Justice (“DOJ”), the Internal Revenue Services (“IRS”), and one or more state securities and banking regulators.

If the originator of a digital asset, coin, or token sells such product to parties in the United States in a form that could be deemed a security, including an investment contract that produces a return on investment without any effort by the investor, that product can be deemed a security by the SEC, the courts and state securities regulators. If the product is deemed a security, the product must either be registered with the SEC or sold pursuant to an exemption from registration with the SEC such as Regulation D (Rule 506) or Regulation CF. If the product is deemed a security and it is sold without being registered with the SEC, the sale could be subject to rescission and monetary penalties.

If a platform facilitates the sale of the products and they are deemed securities, the platform must be registered as a broker-dealer, an ATS, or an exchange. If the product is deemed a security and it is sold without being registered with the SEC through a platform that is not registered, the sale could be subject to rescission and monetary penalties.

Economic Conditions

In a market as large as the United States, this is an impossible question to answer.

Contributing Authors

Carlsmith Ball LLP

Gerald A. Sumida
Honolulu, Hawaii, USA

Carrington, Coleman, Sloman & Blumenthal LLP

Bret Madole
Dallas, Texas, USA

Charles Jordan
Dallas, Texas, USA

Duane Morris LLP

Hope P. Krebs
Philadelphia, Pennsylvania, USA

Thomas Schmuhl
Philadelphia, Pennsylvania, USA

Frost Brown Todd LLC

Joseph Julnes Dehner
Cincinnati, Ohio, USA

Gray Plant Mooty

Christopher Carlisle
Minneapolis, Minnesota, USA

Gaylen Knack
Minneapolis, Minnesota, USA

Holland & Knight LLP

Jorge Hernandez-Toraño
Miami, Florida, USA

Miller Nash Graham & Dunn LLP

Chris Helmer
Portland, Oregon, USA

Kimball H. Ferris
Portland, Oregon, USA

Polsinelli PC

Anthony Nasharr
Chicago, Illinois, USA

Richard Levin
Denver, Colorado, USA

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Chapter Index:

1. Payment Services / Mobile Payment

2. Asset and Portfolio Management

3. Consulting and Broking Services / Robo-advisory / Auto-trading

4. Trading Platforms / Social Trading Platforms / Signal Following

5. Crowdfunding / Crowdinvesting / Crowdlending

6. Virtual Currency - Bitcoin

7. Loan Services / Factoring / Loan Broking / Finetrading

8. Online Banking Services

9. Analytics and Research / Data Management / Risk Management

10. Accounting

11. Identification

12. Online-pawning

13. InsurTech

14. RegTech

15. Initial Coin Offerings (ICOs)

The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: 1 May 2018