Digital assets, popularly referred to as
"cryptocurrencies", "coins", and
"tokens", continue to provoke regulatory attention and
create discord amongst regulators. Recent actions by the U.S.
Commodity Futures Trading Commission ("CFTC") and the
U.S. Securities and Exchange Commission ("SEC")
demonstrate that activities by the issuers of tokens may draw
scrutiny from either or both agencies. As new token issuance
schemes hit the market every day, cryptocurrency market
participants must be cautious because multiple regulatory
enforcement arms are becoming increasingly active in this rapidly
evolving arena.
Background
On September 27, we discussed the latest CFTC enforcement action
involving cryptocurrencies in a
client alert available here. In that case, the CFTC brought an
enforcement action against a group of defendants for fraudulently
soliciting investments for a pooled fund that traded the digital
asset bitcoin. Interestingly, the pooled fund did not
