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.