Blockchain & Cryptocurrency


Author: Tom Wright

As the liquidators of Quadriga CX struggle to be the bearers of welcome news, another cryptocurrency exchange has formally entered into liquidation, and that liquidation has been recognized in the courts of the United States.

Just as the liquidators of Mount Gox, the best known collapsed exchange of them all, considered it necessary, the liquidators of Cryptopia, an exchange based in New Zealand and once with 2 million users, have sought and obtained Chapter 15 recognition, meaning that there is now an automatic stay on court actions taken by creditors to take possession of Cryptopia’s assets in the United States.

Read more: Hacked into Liquidation - Another cryptocurrency exchange bites the dust


Author: Tom Wright

With the Cayman Islands already the leading jurisdiction for the formation of international investment and financial structures, it comes as no surprise that it has achieved pre-eminence in the establishment of companies undertaking initial coin offerings (ICOs) and security token offerings (STOs), as well as funds investing in cryptocurrencies.

What the Cayman Islands courts have yet to encounter, but surely will and must, is litigation or a liquidation proceeding in which Blockchain technology, cryptocurrency or other cryptoassets play a part or, more likely, a starring role. Cayman Islands litigators and insolvency practitioners therefore have limited time in which to acquaint themselves with the legal nuances of these (relatively) new creations, however there is an ever-increasing number of cases from other jurisdictions around the world from which they can achieve an understanding of the likely contentious areas which will arise and how the Cayman courts, laws and jurisprudence may deal with them.

Read more: Cryptoassets and Insolvency - Clues for Cayman from Other Jurisdictions


BACKGROUND

The emergence of cryptocurrencies and Initial Coin Offerings (ICO) has generated hypes and craze worldwide. Domestically, the Central Bank of Malaysia, also known as Bank Negara Malaysia (BNM) reported that the cryptocurrency transactions on four digital currencies exchanges is worth an average of MYR75 million each month in Malaysia.

CopyCash Foundation, a Singapore-based blockchain[1] startup has attempted to launch an ICO in January 2018. The launch had resulted in a heated discussion on the legitimacy of ICO when the Securities Commission Malaysia (SC) issued a Cease and Desist Order to the startup that put a halt to the launch. In light of the recent developments, one might be concerned about the legality of such instrument and arrangement in Malaysia.

Read more: Cryptocurrencies and ICOs in Malaysia


Author: Mark Hiraide

On April 2, 2019, the Division of Corporation Finance of the Securities and Exchange Commission issued a no-action letter to TurnKey Jet, Inc. in connection with a proposed sale of tokens in the United States. It was the first no-action letter relating to cryptocurrencies and was widely heralded as a watershed event (e.g., “SEC Issues First ‘No-Action’ Letter Clearing ICO to Sell Tokens in US”) (see here).

Read more: SEC Issues First Cryptocurrency No-Action Letter – Where’s the Action?


As part of a review into Initial Coin Offerings, the Australian Government Treasury has recently published an Issues Paper (Review) inviting public submissions on the regulatory framework surrounding offerings of cryptographic tokens. With a significant sum raised by businesses globally in 2017/2018 via the issue of tokens, various jurisdictions have been adjusting their regulatory perimeter to encourage innovation in blockchain while still protecting investors. The issue paper takes an optimistic tone but it remains to be seen if Australia will remake itself as a global hub for innovative financial product offerings.

Read more: Regulating STOs and Token Offerings: Australian Treasury seeks submissions