New Jersey Officials Issue Cease-and-Desist Order

The Bureau of Securities and the Attorney General  issued an emergency order in order to stop Bitstrade, an online cryptocurrency investment fund  
12 February 2018   92

New Jersey attorneys have sent a cease and desist letter to a cryptocurrency investment fund called Bitstrade. This firm claimed that it is registered U.S. financial startup. It offers digital asset banking services. According to New Jersey officials, this firm unlawfully provided investors unregistered securities in the form of a pool that claims to guarantee up to 10 percent returns.

The Bureau of Securities and the Attorney General have found that Bitstrade is not registered to sell securities in New Jersey and does not guarantee investment profit. Attorney General Gurbir S. Grewal stated that this firm was managing and selling securities unlawfully. He also added that the Bureau wants to protect investors and remind them to be extra vigilant about fully vetting what is being sold before investing in cryptocurrency.

We want to make sure that investors tempted to cash in on the cryptocurrency rage aren’t being lured into sending funds to an anonymous internet entity without knowing where the funds are going or how they’ll be used.

Gurbir Grewal 

New Jersey’s Attorney General

More than that, Bitstrade is violating the law by failing to disclose to prospective investors the names of its executive officers, the address of its principal office, information about Bitstrade's financial condition. The firm even did not inform how it invests investors’ money.

New Jersey’s officials plan to regulate cryptocurrency asset industry more due to a high risk of fraud.

Wyoming Passed Bill Exempting Utility Tokens from Securities Laws

The Wyoming House of Representatives has unanimously approved a bill exempting utility tokens from securities laws  
20 February 2018   71

On Monday, House Bill (HB) 70 passed the House 60 to 0 and will now head to the Senate. The bill exempts utility tokens from securities laws. This will attracts ICO’s launches to the state and will make the state a favorable environment for blockchain startups.

According to the bill, the utility token must meet three conditions:

  1. The token’s issuer must not market it as an investment;

  2. The token must be exchangeable for goods and services, for example, startups must have a working product or service at the time the tokens are issued;

  3. The token’s issuer must not actively make efforts to create a secondary market for the token by entering into a repurchase agreement or agreeing to locate buyers for the token.

It is important to note that there are four more cryptocurrency and blockchain-related bills currently moving through the Wyoming legislature.

HB 19 passed the House of Representatives on Monday and is now awaiting introduction in the Senate. The bill exempts cryptocurrency from the state’s money transmitter act.

HB 101 has passed its second reading in the House and, if it passes its final hearing, will then go to the Senate. This bill will allow companies to create and use blockchains for the purpose of storing records and conducting inter-office communication.

HB 126 has just passed its second reading in the House. It will allow the creation of series LLCs.

Senate File (SF) 111 passed a vote to introduce on Friday and is now headed to a committee hearing. This bill will exempt cryptocurrency assets from state property taxes.