Earlier this week, cease and desist orders were issued against two online investment entities, Zoptax LLC and Unocall, as part of an ongoing effort coordinated by the North American Securities Administrators Association (NASAA), a task force comprised of North American state and country officials working together to stop fraudulent initial coin offerings (ICOs) and cryptocurrency-related investment schemes. NASAA was organized in April 2018. Since January, its members have initiated over 130 investigations into ICOs and similar products, and completed 35 enforcement actions.
Also this week, Kik Interactive Inc. (Kik), a defendant in an ICO-related enforcement action initiated by the U.S. Securities and Exchange Commission (SEC), denied conducting an unregistered securities offering. Kik stated in its filed response that the SEC "twisted the facts" in its complaint. The SEC began the action in June, asserting that Kik's sale of Kin, Kik's digital token, constituted the sale of unregistered securities. Kik sold $100 million worth of Kin in 2017; $55 million was purchased by U.S. investors.
In late July, a bill aimed at alleviating cryptocurrency investors' tax burden was reintroduced by U.S. Congressman Tom Emmer. The bill would ensure that the exchange of one cryptocurrency for another would be treated the same way as like-kind exchanges of real property. The bill would also provide a safe harbor related to blockchain forking events. On July 30, the U.S. Senate Committee on Banking, Housing and Urban Affairs held a hearing on regulatory frameworks for cryptocurrencies and blockchain. The Congressional Research Service published its prepared testimony for the hearing, which stressed the need for harmonization of global cryptocurrency regulations. Also this week, the United Nations issued a report finding that North Korea has generated $2 billion through cyberattacks targeting banks and cryptocurrency exchanges. The proceeds are reportedly being used to fund the country's weapons program.
For more information, please refer to the following links:
- New Jersey Bureau of Securities Orders Two Online Cryptocurrency Promoters to Stop Offering Unregistered Securities in the State
- Kik Says SEC ‘Twists The Facts’ With Unregistered ICO Claims
- Kik Answer to SEC Complaint
- H.R. 3963: "Virtual Value Tax Fix Act of 2019"
- Crypto Tax Bill Introduced in the US House of Representatives
- Congressional Research Service: "Examining Regulatory Frameworks for Digital Currencies and Blockchain"
- North Korea took $2 billion in cyberattacks to fund weapons program: U.N. report
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