IMVU’s VCOIN SEC Staff No-Action

Represented IMVU, Inc. in obtaining a no-action relief from the U.S. Securities and Exchange Commission (SEC) staff that clears the way for its client, IMVU Inc., to sell VCOIN, a blockchain-based digital asset, as a transferable non-security to its users worldwide. This is the first SEC staff no-action letter involving a blockchain-based digital asset that can be transferred outside of a closed platform and exchanged for fiat currency. With these important features, VCOIN is a new way for IMVU’s users to earn value that can be converted into cash and used in the real world.

Stablecoin Experience

• Advise FDIC-insured bank on regulatory, capitalization and compliance issues related to launching a USD-backed stablecoin.
• Advised group of companies on regulatory and contractual issues involved with launching a USD-backed stablecoin.
• Advise technology company on regulatory issues involved with prospective use of DiemUSD stablecoin.
• Advise US cryptocurrency exchanges on regulatory issues involved with support of stablecoins for trading.
• Counsel for digital asset custodian in obtaining a national trust bank charter from Office of the Comptroller of the Currency, including advice on bank policies and procedures related to customer onboarding, capitalization and stablecoin support.
• Counsel for multiple digital asset custodians in obtaining limited purpose trust company charters from the New York State Department of Financial Services, including advice on policies and procedures related to customer onboarding, capitalization and stablecoin support.

Digital Asset Exchanges

Advised numerous digital asset trading desks and exchange businesses on the implication of federal and state money transmission and payments laws on the respective business models, including engaging with state regulators via applications and no-action letters.

MoneyGram

Advised MoneyGram by assisting in negotiations and drafting of agreements related to contemplated product integrations with digital asset products offered by Calibra and Coinme.

Launching Margin Trading Products

Counselled several major digital asset exchanges on the federal and state law implications of launching margin trading products, including conducting meetings with the CFTC and preparing applications for state lending licenses.

Crypto Civil Litigation and Enforcement

In 2018, we were retained to represent numerous entities involved in the cryptocurrency environment related to investigations being conducted by state and federal agencies. Our investigations break down into two sections: civil litigation and enforcement. We are currently handing 12 SEC investigations that primarily center on whether various entities raised funds through an unregistered public offering, and whether they acted as unregistered broker-dealers or investment companies. Separately, the SEC is also looking into possible misrepresentations and misuse of proceeds in a few of these matters. On the state side, we have represented 8 entities in responding to information requests and subpoenas by state agencies.

Overstock.com

Represented Overstock in its shelf registration statement of the first ever SEC-registered public offering of digital securities and the first project to use blockchain technology. Overstock created a startup called T0 that served as the trading platform for digital securities. We represented Overstock in the creation of the startup and prepared the shelf registration statement for the public offering.

Blockchain and Manufacturing

Advised a designer and producer of ASIC chips and products and PCB boards on technological and data management aspects of its integration of blockchain technology into its everyday applications.

Advise to the Government on Blockchain

Advised 15 U.S. House Representatives and Senators on ways to integrate blockchain technology into government functions to reduce bureaucracy.

Blockchain for Financial Services

Advised PeerNova on the development of it blockchain-based financial services technology platform.

Blockchain: Financing

Represented a provider of data layer platform technology that records and stores any type of data into the blockchain in its preferred stock financing.

Blockchain: Regulatory Compliance 

Advised a provider of data layer platform technology that records and stores any type of data into the blockchain on regulatory compliance in connection with international trade activities.

Virtual Currency Investment

Represented Andreessen Horowitz in a $25 million Series B investment in Coinbase, a San Francisco-based Bitcoin wallet and platform where merchants and consumers can conduct transactions with digital currency. The investment was the largest investment to date in the Bitcoin and virtual currency industry.

Money Transmission License

Helped CoinMe, a Bitcoin kiosk company, obtain the first money transmission license issued by Washington state to virtual currency.

First Ever Bitcoin Tax-Exempt Status

Assisted BitGive Foundation in obtaining tax-exempt status. This is the first time the IRS has granted tax-exempt status to a bitcoin nonprofit charitable organization.

Drafting Anti-Money Laundering Policies

Assisted an industry-leading Bitcoin kiosk company by developing their security and anti-money laundering policies.

Developing Anti-Money Laundering Programs

Developed comprehensive anti-money laundering programs tailored to virtual currency offerings for several virtual currency companies.

Virtual Currency Startups

Represented multiple startup clients in corporate and regulation work, including wallet providers and mining companies.

Subpoenas and Cease and Desist Letters

Helped virtual currency companies respond to subpoenas and cease and desist letters.

Unfair Competition in Virtual Currency

Obtained dismissal for a virtual currency client from a case alleging unfair competition, unjust enrichment and gross negligence for allegedly failing to obtain a money transmitter license in California.

Wage and Hour Issues With Virtual Currency

Advised virtual currency company on wage and hour issues related to compensating employees in virtual currency.

Insurance

Guided virtual currency companies through the process of securing insurance for significant risks, including for theft of virtual currencies and protecting the board of directors.

Virtual Currency Company Terms and Policies

Developed terms of service, terms of sale and privacy policies for multiple virtual currency companies.

Bankruptcy

Representing depositor in Mt. Gox Chapter 15 bankruptcy case.

Nasdaq

Represented Nasdaq in the development of its blockchain-based technology platform Nasdaq Linq, first used by software developer and infrastructure provider Chain.com to issue shares on December 31, 2015. Nasdaq Linq is a digital ledger technology that leverages a blockchain to facilitate the issuance, cataloging and recording of share transfers for privately held companies.

Money Transmission Licensing

Counsel and aid several clients in obtaining state money transmitter licenses, including providing a state-by-state report.

Token Sales

• Represent a blockchain software technology company on several token sale projects currently in process.
• Represent a token sale advisor on several token sales currently in process.
• Represent Citizens Reserve with respect to regulatory advice and licensing as relates to issuing of tokenized assets.

Enforcement (FinCEN)

Counsel client on U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN) issues.

Tokenization Fund

• Represent fund raising capital to invest in token sales currently in process.
• Represent fund creating tokenized LP interests for sale currently in process.

Blockchain for Enterprise

Enterprise Ethereum Alliance Inc.: Not-for-profit formation, open-source IP consult and advising firm for the alliance.