Real-world legal cases in crypto
[cryptolaw_takeaway]FASB issued new accounting standards for cryptocurrency in 2023, effective for fiscal years beginning after December 15, 2024. The new rules require fair value measurement with changes recognized in income, replacing the previous impairment-only model. Companies holding crypto assets should prepare for implementation and evaluate financial statement impacts.[/cryptolaw_takeaway] The New FASB Standard In December 2023,…
[cryptolaw_takeaway]Insurance coverage for cryptocurrency holdings remains limited but evolving. Specialized crypto insurance products cover custody, theft, and errors, though capacity is constrained and premiums are high. Traditional insurance policies typically exclude digital asset losses. Understanding coverage gaps is essential for risk management.[/cryptolaw_takeaway] The Insurance Gap Traditional insurance policies generally do not cover cryptocurrency losses: Crime…
[cryptolaw_takeaway]Crypto companies face persistent challenges accessing banking services, with many experiencing account closures, service denials, or restricted relationships. Regulatory pressure, compliance costs, and reputational concerns have led banks to “de-risk” the crypto sector. Recent legislative attention to “debanking” may provide some relief, but banking access remains a significant operational challenge.[/cryptolaw_takeaway] The Debanking Problem Many cryptocurrency…
[cryptolaw_takeaway]Cryptocurrency advertising faces restrictions under SEC rules, FTC guidelines, state consumer protection laws, and platform policies. Paid promotions require clear disclosure, performance claims must be substantiated, and influencer endorsements face heightened scrutiny. The SEC has brought enforcement actions against celebrities and influencers for undisclosed crypto promotion.[/cryptolaw_takeaway] SEC Advertising Restrictions When crypto assets constitute securities, advertising…
[cryptolaw_takeaway]OFAC sanctions compliance applies to cryptocurrency transactions without exception. Crypto businesses must screen customers, counterparties, and blockchain addresses against sanctions lists. Recent enforcement actions—including the Tornado Cash designation—demonstrate OFAC willingness to pursue novel sanctions applications in the digital asset space.[/cryptolaw_takeaway] OFAC Jurisdiction Over Crypto The Office of Foreign Assets Control administers U.S. economic sanctions programs,…
[cryptolaw_takeaway]Cryptocurrency creates unique estate planning challenges because assets are controlled by private keys rather than institutional custodians. Without proper planning, digital assets may be permanently inaccessible after death. Estate plans must address key storage, fiduciary access, and compliance with state digital asset laws.[/cryptolaw_takeaway] Why Crypto Requires Special Estate Planning Traditional assets like bank accounts, brokerage…
[cryptolaw_takeaway]Cryptocurrency custody requirements vary based on the entity type and regulatory framework. Investment advisers must use qualified custodians for client assets, while exchanges face custody standards under state and federal money transmission rules. Institutional adoption increasingly depends on robust custody solutions that satisfy regulatory requirements while maintaining security.[/cryptolaw_takeaway] Investment Adviser Custody Requirements Investment advisers registered…
[cryptolaw_takeaway]Cryptocurrency exchanges face overlapping federal and state regulatory requirements spanning anti-money laundering, securities, commodities, and consumer protection laws. Building a robust compliance program requires dedicated resources, experienced personnel, and ongoing adaptation to evolving regulatory expectations.[/cryptolaw_takeaway] Multi-Layered Regulatory Framework Operating a cryptocurrency exchange in the United States requires navigating multiple regulatory regimes simultaneously: FinCEN: Registration as…
[cryptolaw_takeaway]Cryptocurrency businesses operating in the United States typically need money transmitter licenses in each state where they serve customers. This creates a complex compliance burden, with 49 states plus DC and territories each imposing distinct requirements. The New York BitLicense remains the most demanding, while some states offer crypto-specific frameworks or exemptions.[/cryptolaw_takeaway] Federal vs. State…
[cryptolaw_takeaway]The IRS treats cryptocurrency as property, meaning every sale, trade, or purchase triggers a taxable event. New broker reporting rules under the Infrastructure Investment and Jobs Act require exchanges to issue 1099 forms starting in 2026. Maintaining detailed transaction records is essential for accurate reporting and audit defense.[/cryptolaw_takeaway] How the IRS Classifies Cryptocurrency Since IRS…
[cryptolaw_takeaway]Cryptocurrency businesses that exchange, administer, or transmit virtual currency qualify as Money Services Businesses under FinCEN regulations. This classification triggers Bank Secrecy Act compliance obligations including registration, AML program implementation, suspicious activity reporting, and extensive recordkeeping. Civil penalties can reach millions of dollars, and criminal prosecution remains possible for willful violations.[/cryptolaw_takeaway] Money Services Business Classification…
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