Last week a federal district court ruled that a social media company’s initial fundraising to build a blockchain application as well as its later, proposed distribution of digital tokens to serve as virtual currency and for other legitimate purposes on the blockchain constituted an integrated unlawful offering of securities without a registration statement and granted a preliminary injunction banning the distribution as requested by the Securities and Exchange Commission. Separately, a futures commission merchant was sanctioned by the Chicago Mercantile Exchange as a result of a purported operational breakdown that enabled it to accept trades “far beyond” risk limits that should have been in place for the relevant account. As a result, the following matters are covered in this special edition of Between Bridges:
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US Court Rules in Favor of SEC in Telegram Lawsuit; Holds That “Grams” Digital Assets Promised as Part of Private Offering Constituted Securities (includes My View);
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FCM Sanctioned US $150,000 by CME for Alleged Risk Management System Breakdown Permitting Excessive Customer Trading (includes Compliance Weeds);
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CFTC, SEC and Other…
