Law

SEC, ICO, IRS, BSA – A Few of the Acronyms of Blockchain and Cryptocurrency Law (1)

By Edward Tolchin, Offit Kurman

Blockchain companies have raised billions of dollars through Initial Coin Offerings (ICOs) this past year. Has it all been legal? Have all the correct taxes been paid? Are all the companies issuing the coins operating legally? The answer may likely be “no” to at least one, or perhaps all three, of these questions. If you are considering a blockchain enterprise and an ICO and want to abide by the law, or want to assure that any company in which you are participating is abiding by the law, here’s a five-part primer on the issues to consider.

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Law

SEC, ICO, IRS, BSA – A Few of the Acronyms of Blockchain and Cryptocurrency Law (3)

By Edward Tolchin, Offit Kurma

Part 3: The Pay-A-Lot-Of-Taxes Rule

There is a straightforward tax rule in the US: the IRS treats the proceeds of an ICO at taxable income. The amount of taxable income is also simple: the value of everything received in the ICO, though an accountant may be able to argue about some deductions for you. So, the general rule is that if you raise a dollar, you pay taxes on the dollar. Or, as the IRS explains, “the basis of virtual currency that a taxpayer receives … is the fair market value of the virtual currency in U.S. dollars as of the date of receipt.”

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Law

SEC, ICO, IRS, BSA – A Few of the Acronyms of Blockchain and Cryptocurrency Law (4)

By Edward Tolchin, Offit Kurman

Part 4: Money Laundering 101

The United States Treasury’s Financial Crimes Enforcement Network (FinCEN) enforces the Bank Secrecy Act (BSA) and its anti-money laundering regime. Why is that applicable, or at least potentially applicable, to blockchain enterprises conducting ICOs? Simple: The BSA regulates “financial institutions” and neither Congress nor the Treasury has tightly defined that term, so enforcers have flexibility to expand the law to cover some developers of new blockchain token protocols selling tokens to US citizens. In other words, while you may think that a “financial institution” is a bank or broker-dealer, it may be more.

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Law

SEC, ICO, IRS, BSA – A Few of the Acronyms of Blockchain and Cryptocurrency Law (5)

By Edward Tolchin, Offit Kurman

Part 5: Anti-Money Laundering and the Crypto World

As long ago as 2013, FinCEN published guidance on transactions involving cryptocurrency, which FinCEN termed “virtual currency.” BSA regulates, generally, a financial institution’s “currency” transactions, but the BSA and its regulations define “currency” as fiat currency, not virtual currency. There is a subcategory of financial institutions, however, which extends coverage to a “money services business” (MSB), which includes an entity involved in the transmission of “currency … or other value that substitutes for currency.” Because any cryptocurrency, by definition, is a “value that substitutes for” fiat currency, FinCEN has been able to reach the blockchain/token world.

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Law

Doing Business in Italy? You can do it better with a ‘legality certificate’

By Marina Sonni, Bussoletti Nuzzo & Associati Avvocati

Since 2012, companies carrying their business in Italy can request and obtain from the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato - AGCM) the attribution of the so‐called Legality Rating, an innovative tool based on incentives aimed to increase the competitiveness of companies by promoting ethically principles in corporate conduct (see article 5-ter, Decree-Law 1/2012, converted into Law 62/2012).

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Law

THE LAW FIRM AS A BUSINESS

By Dr Robin Leon Fritz, FPS

I. INTRODUCTION

Law firms today are businesses operating in a highly fragmented and intensely competitive environment. The market for legal services is a transparent one. Those interested in this market, potential future developments in the market and what firms need to do to successfully position themselves will find a large number of suitable publications. There is also a broad selection of consulting firms and training programs.

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Law

How to Prevent and Remedy Sexual Harassment in the Workplace (II)

By Katharine Batista, Offit Kurman

The Fourth Circuit has stated that its ‘cases have sought to distinguish between those situations that indeed present serious impediments to minority and female workers and those situations when human nature simply is not at its best.’ Ziskie v. Mineta, 547 F.3d 220 (4th Cir. 2008). If the highest federal courts struggle with the distinction, it’s not one you should take on after simply hearing a brief description of the alleged harassment.

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Law

Trademarks: Are They Worth Registering?

By David Greber, Offit Kurman

Businesses often use trademarks or service marks to market products or services that they offer. How do these businesses avoid being sued for infringing other ‘marks’ and prevent other businesses from using confusingly similar marks?

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Law

Preliminary agreements in Australia – are they enforceable?

By Andrew Lacey and Danyal Ibrahim, McCabes Lawyers Pty Limited

Preliminary agreements are common precursors to complex commercial contracts, and take the form of documents such as heads of agreement, letters of intent and memoranda of understanding, to name a few. They are also used in the context of conveyancing of properties, sale of business and supply of goods or services.

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