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The Long Shadow of Mt. Gox - Mar 2019

In the wake of the fifth anniversary of Mt Gox’s collapse, it is worth re-examining what happened and considering some of the key legal issues which have arisen since.  Founded by technological entrepreneur Jed McCaleb and launched in July 2010, Mt Gox was a bitcoin exchange platform based in Tokyo, Japan. Prior to its collapse in 2014, Mt Gox was the largest Bitcoin trading exchange in the world, boasting over 24,700 customers globally.  During it’s peak, it was estimated to have accounted for 70-80% of all Bitcoin transactions worldwide, having held around 850,000 Bitcoins, which are today worth approximately AUD$4.28B.

As the largest and earliest significant collapse of a crypto business, it is interesting to consider how the Courts and law have tried to deal with the novel issues raised by the situation.

Regulating STOs and Token Offerings: Australian Treasury seeks submissions - Feb 2019

As part of a review into Initial Coin Offerings, the Australian Government Treasury has recently published an Issues Paper (Review) inviting public submissions on the regulatory framework surrounding offerings of cryptographic tokens.  With a significant sum raised by businesses globally in 2017/2018 via the issue of tokens, various jurisdictions have been adjusting their regulatory perimeter to encourage innovation in blockchain while still protecting investors.  The issue paper takes an optimistic tone but it remains to be seen if Australia will remake itself as a global hub for innovative financial product offerings. 

Before getting into the details of the paper, we note that treasury has used the phrase “ICO” heavily. Given that the use of “ICO” is falling out of favour in a depressed market for so called “utility tokens” and the increasing rise of so called “security tokens” or “STOs”, we will use the more neutral “token offering” in this article to refer to offerings made which are in the form of cryptographic tokens.

Beyond the Hype Cycle: Blockchain explainer - Oct 2018

Piper Alderman’s Blockchain Group has been at the forefront of the blockchain revolution, advising leading Australian and international projects using this exciting new technology to gain greater business efficiencies, forge new business models and disrupt incumbent intermediaries.  We regularly present explainers on Blockchain, and in this article we set out a primer and some examples of how Blockchain technology operates, to assist you in understanding some key concepts in the technology.

Podcast: Blockchain, cryptocurrency and changing client expectations - Jul 2018

Michael Bacina talks to Jerome Doraisamy in the latest edition of Lawyers Weekly podcast: "Blockchain, cryptocurrency and changing client expectations".  Listen to learn more about ways in which blockchain and cryptocurrency innovations are driving change in the legal sector. 

So you want to run an Initial Coin Offering/Token Sale in Australia… - Jun 2018

There has been increasing interest in initial coin offering/token sale/token generation events (ICO) in Australia this year. Below we set out 5 key areas and recent developments you should be aware of if you are considering running an ICO/token sale.

CryptoLaw: The Business of Bitcoin - Apr 2018

1. Introduction

Since Bitcoin was introduced in 2008, it has continued to grow in popularity, public awareness and adoption. As of the time of writing, the market capitalisation of Bitcoin is almost USD$126 billion with an estimated 15 million users. With mixed reports as to the popularity of Bitcoin as a means of payment, the leading online payment gateway, Bitpay, was on track in December 2017 to process US$1 Billion in transactions per year.

Never before has the world seen such widespread and fast adoption of a socially agreed medium of exchange which is not backed by a government.

$1B lost: the 5 biggest cryptocurrency fails of 2017 - Jan 2018

2017 was a stellar year for cryptocurrency valuations in general and Bitcoin in particular. On 1 January 2017 the USD$ value of a Bitcoin passed USD$1,000 and one year later on 1 January 2018 the price was USD$13,700.

On 17 December 2017, Bitcoin reached an all time high price of $19,783.

But it hasn’t been plain sailing for the crypto ecosystem with a number of security breaches and exploits in 2017 showing how vulnerable operations can be to malicious actors.

ASIC Guidance on cryptocurrency token sales: a ban or sensible regulation? - Sep 2017

The Australian Securities and Investment Commission (ASIC) yesterday issued a press release and guidance for those considering launching an Initial Coin Offering (ICO/Token Sales). Given the ease with which an ICO (also known as a Token Sale) can be launched, and the huge amounts raised to date (USD$2.115 billion this year alone) this guidance has been eagerly awaited from ASIC. 
Partner, Michael Bacina discusses.

Unlocking cryptocurrency token sales - Sep 2017

If it walks like a financial product, looks like a financial product and quacks like a financial product…

  • Token sales (also known as Initial Coin Offerings) offer a new form of fundraising which involve an exchange of fiat currency (US or Australian dollars for example) for a digital token. The sales are proving immensely popular with high risk investors.
  • Digital tokens generally fall within the category of either protocol tokens (such as Bitcoin) where the token itself has intrinsic value, asset-backed tokens (such as The DAO tokens) where a token holder is entitled to a real underlying asset, or access tokens (such as Golem) where tokens are used to access a network, often which has not yet been built.
  • There is a risk of token sales falling under securities law regulations, in addition to potential GST issues under the ‘Netflix tax’, which create uncertainty for businesses looking to harness this new source of potential funding.

Smart contracts in Australia: just how clever are they? - Aug 2017

Lawyers in practice today live in a world of ongoing disruption. As automation,  artificial intelligence and blockchain technology assists in reducing the costs of business transactions and increases the reliability of record keeping, the adoption of smart  contracts is an opportunity for lawyers to help their clients improve efficiency and to reduce the scope for disputes, and a challenge for lawyers who do not stay abreast of this area.

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