Category Archives: Virtual Currency

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Is there a Unicorn Among ICO Issuers?

The United States Securities and Exchange Commission (“SEC”) has indicated that nearly all initial coin offering (“ICO”) filings they have seen are securities offerings. Based on this expansive view, it may be more likely to find a Unicorn than an ICO that is not a securities offering. Ironically, a recent lawsuit was filed against Unikrn, … Continue Reading

SEC Declares Ether Is Not a Security

The SEC has formally announced that Ether is not a security. The U.S. Securities and Exchange Commission Director of Corporate Finance William Hinman said that the commission would not be classifying ether or bitcoin as securities. Other comments of note include that if a cryptocurrency network is sufficiently decentralized and purchasers no longer have expectation … Continue Reading

Recent Blockchain Patents of Note

As we have previously reported, the number of blockchain patents being filed and granted is continuing to increase. According to a Thomson Reuters report, 225 out of the 406 blockchain patents (55.4%) filed in 2017 came from China, followed by 91 (22.4%) from the U.S. and 13 (3.2%) from Australia. The following is a brief … Continue Reading

Churchill Downs Seeks En Banc Review of Big Fish Decision

Churchill Downs has filed a Petition For Rehearing En Banc, seeking to overturn the Ninth Circuit decision in the Big Fish case. As we previously reported, The Ninth Circuit Court of Appeals reversed a district court’s dismissal of a purported class action and held that a social casino game constituted illegal gambling under Washington law. … Continue Reading

Belgium Gaming Commission Loot Box Report – Extends Beyond Game Companies to Licensors and Game Platforms

We previously reported, that the Belgian Gaming Commission has recommended criminal prosecution against certain game companies due to the allegedly illegal use of loot boxes. This report follows previous reports on findings by the Netherlands. The Belgian Gaming Commission includes recommendations that extend to certain companies doing business with game companies, including Licensors (e.g., FIFA) … Continue Reading

Legal Issues With Blockchain-Based Crypto Games and Collectibles

The use of blockchain technology for crypto games, such as CryptoKitties, and other token-based digital collectibles is on the rise. Also growing is the number of tokenized-assets marketplaces such as Rarebits and cryptocurrency designed specifically for gaming, such as Enjin Coin. These innovative platforms are leveraging the power of blockchain technology as applied to games and … Continue Reading

The Game Goes On: Sheppard Mullin Obtains Dismissal With Prejudice of Class Action Alleging Social Gaming Micro-transactions Constitute Illegal Gambling

This blog post originally appeared on the Class Action Defense Strategy Blog on February 8, 2016 Another lawsuit alleging illegal gambling in a social game has been dismissed. Over the last year, social gaming mobile applications have come under attack from the Plaintiffs’ bar as gambling in disguise. Plaintiffs’ attorneys theorize that in-app micro-transactions where … Continue Reading

Social Game Site Excludes Washington Players; Gambling Commission Comments

As previously reported, The Ninth Circuit Court of Appeals reversed a district court’s dismissal of a purported class action and held that a social casino game constituted illegal gambling under Washington law. According to the Court, all online or virtual gambling is illegal in Washington state. The panel held that the virtual chips extended the … Continue Reading

Drafting Effective Blockchain Patents

As the number of blockchain-based patents and patent applications increases, more companies have become interested in pursuing these patents. Other companies still think that blockchain-based inventions are not patentable. To help sort fact from fiction, we have prepared a paper to provide an update on blockchain patents, provide guidance on the types of blockchain inventions … Continue Reading

Crypto-Crime: The SEC and DOJ Go After BitFunder and Its BitFounder

Taking further steps into the world of cryptocurrency, two entities of the federal government recently took legal action against BitFunder, a now-defunct Bitcoin exchange, and its founder, Jon Montroll. The Securities and Exchange Commission filed civil charges against BitFunder and Montroll, and the U.S. Attorney’s Office in Manhattan brought criminal charges of perjury and obstruction … Continue Reading

Patent Strategies for Cryptocurrencies and Blockchain Technology

Cryptocurrencies and blockchain technology are rapidly emerging as disruptive technologies. As has happened with many new technologies, particularly disruptive ones, a patent arms race is occurring. The number of patents being filed for these technologies is rapidly increasing. The number of published applications shows roughly a tenfold increase over the number of issued patents. Despite … Continue Reading

Apple Requires Disclosure of Odds for Loot Boxes

Apple just announced a number of changes to its App Store Review Guidelines, including the requirement that apps offering “loot boxes” or other mechanisms that provide randomized virtual items for purchase must disclose the odds of receiving each type of item to customers prior to purchase. This comes as the incredibly successful monetization mechanic of … Continue Reading

CFTC Issues Primer on Virtual Currency, Virtual Tokens and ICOs

The Commodity Futures Trading Commission’s LabCFTC recently released, “A CFTC Primer on Virtual Currencies.” This primer provides an overview of virtual currencies and their potential use-cases, helps outline the CFTC’s role and oversight of virtual currencies, and cautions investors and users of the potential risks involved with virtual currencies.… Continue Reading

Are Loot Boxes An Illegal Gambling Mechanic?

A member of the United Kingdom’s Parliament has opened an inquiry into the legality of loot boxes. Loot boxes are virtual items that may be redeemed to receive a randomized selection of additional virtual items. Various countries around the world have recently moved to regulate the provision of loot boxes in video games, often in response to … Continue Reading

China Halts ICOs

China has put a halt to Initial Coin Offerings (ICOs) in China. In a recent notice, China declared ICOs to be an illegal fund raising tool and indicated it is reviewing previous ICOs for possible fraudulent practices. Money previously raised will also have to be returned. It is unclear yet whether this will be a … Continue Reading

SEC Issues Warning on Certain ICOs

As the number and dollar volume of Initial Coin Offerings (“ICOs”) continue to increase, the SEC has taken a greater interest in this activity. As we previously reported, the SEC issued its initial ICO guidance on July 25, 2017. In this guidance it declared that depending on the facts and circumstances, an ICO offering may … Continue Reading

Nevada Passes Pro-blockchain Law

Nevada has passed a pro-blockchain law that recognizes blockchain technology as a type of electronic record for the purposes of the Uniform Electronic Transactions Act and prohibits taxation and regulations regarding the use and implementation of blockchain technology.… Continue Reading

The Game Goes On: Sheppard Mullin Obtains Dismissal With Prejudice of Class Action Alleging Social Gaming Micro-transactions Constitute Illegal Gambling

Another lawsuit alleging illegal gambling in a social game has been dismissed.  Over the last year, social gaming mobile applications have come under attack from the Plaintiffs’ bar as gambling in disguise.  Plaintiffs’ attorneys theorize that in-app micro-transactions where consumers pay cash for virtual items (i.e., gold coins or gems) designed to speed up or … Continue Reading
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