Legal Seminar, Denver, CO
Coin Offerings • SEC has brought several enforcement actions. • Private class action launched in CA against Ripple for offering XRP tokens • Volatility (especially of the downward trend) incentivizes blame; both private actors and government actors are motivated to address harms. • There are indeed bad actors with “badges of fraud” (18% of 1450 offering sites had “red flags” present)
Coin Offerings
• Tax issues are also relevant. – For those engaged in offerings, this is likely taxable income. (Cf. IRC § 1032, 721 (providing nonrecognition treatment to issuing entity for stock or partnership interest) – IRS addressing trading gains/losses (e.g., Coinbase subpoena of customer information) through audit – Significant unresolved issues, with latest substantive guidance issued in 2014.
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