Cryptocurrency and Blockchain Resources Center

June 26, 2018

The increasing use of cryptocurrencies and other digital assets has given rise to complex legal issues relating to regulatory status (including requirements to register as broker-dealers, commodity pool operators, commodity trading advisors, investment advisers, investment companies, securities exchanges and money service businesses), compliance (including valuation, custody and reporting), corporate law (such as maintain shareholder records), securities transactions (including initial coin offerings and M&A transactions), fund formation, the launch of ETFs and derivatives, venture capital, taxation, anti-money laundering, litigation and regulatory enforcement.

Dechert offers sophisticated and knowledgeable legal counsel to clients navigating this rapidly evolving space.  At the heart of Dechert’s cryptocurrency and blockchain practice is a deep understanding of the technologies that drive blockchain and related developments in distributive computing networks.  In addition, Dechert is distinctive among leading law firms in this area by bridging the financial service regulation and new financial technology to find solutions for our clients.

Since the launch of bitcoin in 2009, cryptocurrencies and the encrypted, decentralized blockchain protocol that underpins them have grown from abstract theories to a transformational force that is disrupting the way many industries will operate for decades to come.

Decentralized ledger technology and smart contracts could ultimately reshape many industries, including financial services, intellectual property, logistics and supply chain, the internet of things, energy, health care, insurance and the sharing economy.

The landscape for financial products and services integrating blockchain technology is evolving rapidly.  Whether launching funds to invest directly or indirectly in digital assets or creating new coins or tokens in connection with the launch of new distributive networks, clients operating in this area have specialized needs that Dechert is particularly well-placed to serve.

Our Experience
  • Advising and assisting private cryptocurrency fund sponsors on all aspects of the fundraising lifecycle, including fund formation, regulatory compliance and market terms; preparing offering documents for new private cryptocurrency funds, including private placement memoranda, limited partnership agreements and subscription agreements; global regulatory advice; tax efficient investment structuring; and carried interest, management equity arrangements and other incentive structuring.
  • Representing registrants with proposals for Securities and Exchange Commission (SEC)-registered cryptocurrency funds (both funds registered under the Investment Company Act and those registered only under the Securities Act) including proposals for obtaining exposure through both physical cryptocurrency holdings and through use of futures contracts.
  • Preparing and negotiating registration statements and other filings.
  • Extensive work with multiple divisions of SEC relating to novel regulatory issues raised by such funds.
  • Advising clients regarding Investment Company Act and Investment Advisers Act issues raised by use of blockchain technology for conventional asset classes – e.g., custody.
  • Advising on the latest regulatory developments from the SEC, Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) regarding cryptocurrencies, cryptocurrency derivatives and other digital assets.
  • Working with companies considering initial coin offerings to navigate whether tokens are considered securities under relevant U.S. federal and state laws.
  • Advised a crypto-currency focused fund on obtaining a European Stock Exchange Listing.
  • Advising on Anti-Money Laundering/Know Your Customer issues and related compliance issues.
  • Advising on money services businesses and money transmitters and their registration requirements.
  • Working with venture capital firms on transactions involving blockchain-related companies.
  • Advising intermediaries in the cryptocurrency economy – including brokers and exchanges – on their compliance obligations.

Resources

Cryptocurrency Compliance for Asset Managers (July 25, 2018)

US Blockchain Enforcement and Litigation Update (June 27, 2018)

Irish Revenue Commissioners Issue Guidance Manual on the Taxation of Cryptocurrencies (June 26, 2018)

SEC Division of Corporation Finance Director Discusses Digital Assets, Opines That Ether and Bitcoin Are Not Securities (June 18, 2018)

Chinese President Xi Jinping Endorses Blockchain in Recent Speech (June 14, 2018)

SEC Softening Stance on Cryptocurrency? (May 31, 2018)

NASAA Announces Results of “Operation Cryptosweep,” Praised by SEC Chairman (May 25, 2018)

Crypto Funds - Vehikel zur Investition in Krypto-Assets (May 24, 2018)

FCA Publishes Statement on Cryptocurrency Derivatives (May 23, 2018)

Irish Government Releases Paper on Virtual Currencies and Blockchain Technology (April 5, 2018)

FinCEN Warns That Virtual Currency Activities Are Subject to Anti-Money Laundering Obligations (April 3, 2018)

The European Commission Action Plan for FinTech Includes Blockchain Priorities (March 29, 2018)

House Financial Services Committee Holds Hearing to Discuss Cryptocurrencies, ICOs (March 28, 2018)

SEC Issues Statement on Potentially Unlawful Online Platforms for Trading Digital Assets (March 27, 2018)

Federal Court Ruling Recognizes CFTC Jurisdiction over Cryptocurrencies as Commodities (March 23, 2018)

Wyoming Passes Law Creating New Asset Class for Cryptocurrencies (March 22, 2018)

SEC Staff Seeks Industry Engagement on Questions Regarding Development of Funds Holding Cryptocurrency-Related Products (January 29, 2018)

SEC Chairman Issues Major Statement on Cryptocurrency and ICOs (December 20, 2017)

Bitcoin Futures Trading Commences; Implications for Funds and Registered CPOs and CTAs (December 18, 2017)

U.S. v. Coinbase: Virtual Currency Holders Not Outside the IRS’s Reach (December 08, 2017)

CFTC Staff Aligns with SEC Position on Initial Coin Offerings: Tokens May be Commodities (October 20, 2017)

Global Update: Regulators Focus on Initial Coin Offerings (October 04, 2017)

Asset Management Regulatory Roundup - September 2017, Issue 6 (September 20, 2017)

Employers: Are You Ready for a Cyberwar? Attackers Using Ransomware are Saying Show Me Your Bitcoin! (May 22, 2017)

Dechert Advises GCF on High-Profile Bitcoin Technology Funding (October 15, 2014)


Tune in to our Webinars to Learn More.

July 11, 2018

Hedge Funds Nuts & Bolts: Digital Assets – Blockchain Regulation Developments


March 14, 2018

Hedge Funds Nuts & Bolts: Cryptocurrency and Blockchain Update


November 8, 2017

Hedge Funds Nuts & Bolts: Cryptocurrency Funds - The Basics