Lawyers for SEC Blockchain & Cryptocurrency Compliance
Experienced Team in SEC Blockchain & Cryptocurrency Compliance
Do you need legal assistance on SEC compliance for your blockchain company or cryptocurrency transactions? Are you worried about how the SEC is currently treating cryptocurrencies?
If so, then do not wait a second longer to reach out to a team of experienced SEC Compliance Attorneys and Consultants.
The SEC is the leading federal agency behind cryptocurrency enforcement efforts. Together with various other entities such as the IRS, FinCEN, DOJ, and FBI, the SEC is investigating and bringing charges against blockchain companies for alleged violations of the federal securities laws.
Make sure you are compliant today. Do not let your company get dragged down in a protracted federal investigation. Get the legal assistance you need today.
At Oberheiden, P.C., our team of attorneys brings a high level of experience in the government and private practice. We use this interdisciplinary approach along with our knowledge of blockchain technology and cryptocurrency transactions to give our clients the most comprehensive advice.
Get the compliance advice you need today. Put Oberheiden, P.C. on your side today to advise you on the ever-changing crypto landscape, how it may affect your business model, and how to boost compliance.
SEC Jurisdiction Over Cryptocurrencies
The SEC has jurisdiction over activities, conduct, individuals, entities, and markets and exchanges that impact U:S. investors and U.S. capital markets.
Cryptocurrencies represent a market all of their own. This is a market with unique and unknown risks. There are also fewer investor protections in place.
Because of this, the SEC aims to regulate cryptocurrencies. In fact, the SEC has made well known its jurisdictional leading authority over cryptocurrencies.
That said, there are no current rules or regulations over cryptocurrencies, blockchain companies, ICOs, digital asset transfers, and so on.
A key area that easily conjures up SEC jurisdiction and cryptocurrencies is an initial coin offering (“ICO”). ICOs often involve new coins or tokens that are offered to the public as investment opportunities or as means to fund a new project or development.
If you are launching an ICO, chances are this will implicate the federal securities law in one form or another. The only way to avoid SEC registration issues would be to convince the Commission that your coin or token is not a “security,” which is a challenging task that often demands the services of an attorney.
SEC´s Position on Blockchain Technology and Cryptocurrencies
The SEC´s Enforcement Division is responsible for investigating instances of misconduct, fraud, misrepresentation, and other violations of the federal securities laws.
The most commonly implicated provisions include those on unregistered securities; the antifraud provisions; acting as an unregistered broker; or giving investment advice without registering.
In August 2021, SEC Chair Gary Gensler likened cryptocurrencies to “the Wild West”—thus mandating a vigorous analysis and increased scrutiny.
According to the SEC, practically all crypto-related matters fall under the jurisdiction of the SEC. This includes crypto platforms that facilitate trading of digital assets and lending options. As mentioned, another area of interest are ICOs.
What is the Howey Test?
Before we discuss the Howey Test, let´s discuss for a second why the crypto market flourished so rapidly. A clear reason is the lack of regulation.
That said, several federal agencies have announced their intention to change that. It is therefore incumbent on individuals and companies to retain an attorney experienced in SEC cryptocurrency and blockchain compliance matters and how to avoid SEC scrutiny.
The SEC, for instance, has been mostly interested in ICOs and secondarily on NFTs and various applications of De-Fi technology.
Individuals and developers of these projects often feel that specific disclaimers in their whitepapers that the coin/token is not a security or that the infusion of more decentralization into their operations will save them from regulation.
However, this is unfortunately not the case. The SEC can and has gone after coin/token offerings despite these disclaimers or other tactics to avoid SEC registration.
The Howey Factors
The Howey Test asks whether the coin or token is an “investment contract” or a “security”—thus requiring either registration with the SEC or filing under an applicable exemption.
Under this test, the token or coin must satisfy ALL the following elements:
- An investment of money;
- In a common enterprise;
- With the expectation that the investor will make a profit; and
- Derived solely from the entrepreneurial or managerial efforts of others.
If any one or more of the above factors is not present, the coin/token “fails” the Howey Test, and the coin/token is not a security and does not require registration nor an applicable exemption.
The most notable application of the Howey Test to cryptocurrencies was in 2017 where the SEC issued its DAO Report. In this Report, the SEC relied on the Howey Test to conclude that the tokens issued by the DAO that raised $150 million from investors was an unregistered offering of securities.
If you have questions about when, how, or to what extent your planned or recent token/coin offering implicates the Howey Test, give our team of SEC cryptocurrency and blockchain compliance attorneys a call right away.
How An Attorney Can Help Me with SEC Blockchain and Cryptocurrency Compliance
Blockchain and cryptocurrency compliance matters will differ from case to case in SEC-related areas. At Oberheiden, P.C., our team of SEC Blockchain and Cryptocurrency Compliance attorneys can provide the following services:
- Defeating the government’s case in an SEC fraud or DOJ criminal investigation—whether civil, criminal, or a combination;
- Helping individuals and companies launch an ICO, including drafting whitepapers;
- Advising on compliance obligations regarding various projects involving securities, coin offerings, NFTs, and so on;
- Structuring a coin/token so that it avoids the need to register as a “security” under the federal security laws;
- Guiding clients through federal subpoenas for documents and/or testimony issued by the SEC;
- Defending against litigations involving crypto securities fraud in court;
- Conducting internal audit reviews of the company to identify internal weaknesses, deficiencies, or ither violations;
- Implementing corrective action plans to boost compliance with the federal securities laws
The above point are only examples of how our team can help you. If you have a question about one of the items on this list or another area regarding the SEC and blockchain and cryptocurrency issues, give us a call today.
Need Legal Advice on SEC Blockchain and Cryptocurrency Compliance?
If you need legal assistance on SEC authority or enforcement proceedings involving blockchain companies or cryptocurrency transactions, it is time to take prompt action.
The SEC is keen on investigating this novel and emerging area. Do not let your company, business expansion plans, or future projects and developments get wrapped up in a protracted government investigation.
Let us help you. At Oberheiden, P.C., we have the team and experience needed to advise you on these matters and develop critical ways to boost your compliance.
Call or contact us today for a free and confidential consultation.