Bell Nunnally Partner and Chairman of the Litigation Section Christopher B. Trowbridge co-authored The Lawyer article titled, “Cryptocurrencies without borders.” Trowbridge and Legalink co-authors offered perspectives from around the world – Belarus, Hong Kong, Portugal and the United States – on cryptocurrency regulation. Legalink is a global law firm network with members from more than 60 countries and 70 international cities. Bell Nunnally is one of six U.S. members and the only member firm in Texas. Trowbridge is a commercial litigator whose docket includes securities litigation and broker-dealer disputes, including creditor representation in the collapsed bitcoin exchange Mt. Gox bankruptcy proceeding in Tokyo.
Trowbridge noted that regulatory scrutiny of cryptocurrency firms is increasing in the U.S., with the U.S. Securities and Exchange Commission (SEC) investigating numerous firms and issuing “dozens of subpoenas and information requests to technology companies and advisers involved in the red-hot market for cryptocurrencies.”
Trowbridge added that SEC Chairman Jay Clayton has publicly stated that, while he is optimistic about innovation and related opportunities inherent in cryptocurrency and blockchain technology, he urges investors to be cautious in the sector as they have less protection in initial coin offerings (ICO) than with traditional securities. The lack of protections for investors and cryptocurrency holders has spurred the SEC, working in concert with the U.S. Department of Justice and the U.S. Treasury Department, to more closely scrutinize the space.
Concluding his remarks with a note of caution for companies and investors involved or looking to enter the cryptocurrency space, Trowbridge notes, “This initial volley of subpoenas from the SEC appears to be the start of careful scrutiny of how innovation around cryptocurrencies and ICOs will fit into the U.S. traditional securities regulatory framework.”
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