The law is old and only the technology is new. Courts, regulators, businesses and investors are tackling the new challenges posed by the blockchain revolution and the crypto market, which has exploded to a value of $ 2.2 trillion in just 10 years. There are some cases where lawyers tell us they are looking because there are important questions that are likely to be decided by the proceedings.
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What is a cryptocurrency?
Regulators everywhere are trying to set boundaries for digital assets. To do this, you first need to define your digital assets.
In the United States, the Securities and Exchange Commission, December 2020 Proceedings It argues to Ripple Labs Inc. that tokens qualify as “investment contracts” and that the settlement company’s XRP cryptocurrency must be registered as security at the time of sale. Ripple claims that XRP is a commodity and therefore beyond the authority of the agency.
Security or merchandise? The SEC’s allegations, if it is upheld in court, will strengthen authorities in the battle for cryptographic superiority. Ripple’s victory is in the hands of the Commodity Futures Trading Commission. Also seeking a major crypto role.. Of course, it may ultimately be up to Congress to set the rules.
The case is SECv. RippleLabs, Inc., SDNY, No. 20-CV-10832.
When will cryptography be taxed?
2014 Internal Revenue Service Clarified The cryptocurrency transaction is taxable.The agency said in Note 2014-2 The cryptocurrency will be treated as a capital asset if it can be converted to cash.industry Keep screaming for more guidance..
It may be up to the court to decide another question: when should staking rewards (new tokens cast and distributed in return for verifying blocks on the blockchain) be taxed?
A Tennessee couple, Joshua and Jessica Jarrett, demanded a refund with interest after the IRS taxed the income earned by betting Tezos coins. Jarrett argues that new coins should only be taxed when they are sold, not when they are created. Bakeries are taxed only to sell bread, not to bake it.
The IRS finally refunded to Jarrett.Couple Strict What the agency explains why It returned their money. The agency says the question is controversial as Jarrett has regained their money. The results of this case may provide a little more clarity that the industry demands.
The case is Jarrett vs. United States, MD Tenn. , 3: 21-cv-00419.
Non-fungible tokens (NFTs) raise new questions about intellectual property law.Some of the most interesting cases right now Miramax proceedings Claims copyright infringement by film director Quentin Tarantino.
The proceedings focus on the question of who has the right to sell NFTs that link to the “Pulp Fiction” script.Tarantino retained the right to publish the script under the 1993 agreement, but Miramax 2021 Complaints We argue that those rights do not extend to NFTs that did not exist at the time.
Other cases that are being carefully watched in this area include Nike Trademark Infringement Proceedings Against StockxWhen Hermes sues Mason Rothschild in Birkin bag NFT..
The case is Miramax, LLC vs Tarantino, CD Cal. , 2: 21-cv-08979.
Lawyer fighting for digital money
Where stakes are high, the controversy over money will surely continue. Roche Freedman, one of the latest law firms, faces second. Court struggle Involve another former partner in the battle for crypto tokens, which are said to have risen in value to $ 250 million.
Paul Fatalso Complaints After leaving Roche Friedman last year, the company filed in Florida on March 22 that it afflicted him with nearly $ 1 million in compensation associated with his 2% stake. He resigned from the company in protest and said his colleague Jason Syllunick was kicked out after the crypto tokens the company received for payment became incredibly valuable.
The case is Fattarusov. Roche Freedman, Fla. Cir. Ct. , 2022-005345-CA-01.
Everything else about tethers and stablecoins
and, Stablecoin.. By definition, these are assumed to be tied to, or “fixed,” to fiat currencies such as the US dollar, or assets such as gold.Reliability recognized in the volatility of other digital assets gives Stablecoin an important role in trading Between A cryptocurrency comparable to the role that the US dollar plays in the global financial markets.
The largest stablecoin, Tether, has a market capitalization of $ 81 billion and the next largest USDC is valued at $ 52 billion. This is one of the largest financial institution companies in the world. However, there are many skeptics who say that the numbers are not always totaled.
Central bankers and financial professionals around the world Questions raised Many suggest that banks should be regulated about the potential impact of Stablecoin on the financial sector.
November Commodity Futures Trading Commission Fines Tether $ 41 Million.. Regulatory said For several years, the company mistakenly said that it had enough US dollar reserves to back up all the tokens in circulation with “amount equivalent to the corresponding fiat currency” and that the funds were “safely deposited” in the account. Was insisting.
However, according to the CFTC, “Tether did not disclose that unsecured loans and non-statutory assets were included in the reserve,” falsely claimed, otherwise the reserve would be audited regularly. Insisted. A Individual payment In collaboration with the Attorney General of New York, a $ 18.5 million fine was imposed.
So far, class action proceedings are swirling, Official scrutiny is intense.. Watch out for tethers and their stablecoin peers.
— With the support of Rose Acoraci Zeck, Roy Strom, and Samantha Handler.