Category Archives: Blockchain

Illinois Cryptocurrency: Pay Your Taxes With Bitcoin?

Illinois CryptocurrencyCryptocurrencies have become legitimate market movers; so some states, like Illinois, are considering token tax payments.

Illinois Cryptocurrency: Accepting Bitcoin Could Help Cure Budget Problem

Michael Zalewski, a state representative in the Land of Lincoln, introduced a bill that would allow for cryptocurrency tax payments. His rationale is that by accepting bitcoin, and other pre-approved altcoins, Illinois would collect more taxes, which would bolster the state’s bottom line.

Under the proposed system, taxpayers would send crypto to the state, which authorities would convert to dollars within 24 hours of receipt.

Illinois Cryptocurrency: Other States Are Making Similar Moves

You won’t be able to pay this year’s taxes with bitcoin. The bill needs to pass both houses of the Illinois legislature and then signed into law by the governor.

Still, cryptocurrency advocates welcome the news. Hey, if government entities continue to entertain the issue,  cryptocurrencies will likely gain wider acceptance.

Lawmakers have introduced similar pieces of legislation in New Hampshire, Arizona, and Georgia. But, so far, none have become law.

Being able to pay taxes with cryptocurrency would be hugely beneficial for token investors. Using the current exchange rate, the average taxpayer in Illinois would easily be able to take care of his or her tax bill by parting with just a single bitcoin.

Connect With An Illinois Cryptocurrency Lawyer

The Gordon Law Group regularly works with cryptocurrency investors and blockchain businesses on everything from contract negotiations to compliance consultations. Additionally, our attorneys are well-versed in various offshore token investment opportunities and asset protecting options.

We’ve built a reputation in the crypto community as straight shooters with inventive solutions. Get in touch today to begin the conversation.

Blockchain Re-brands Spawn Investor-Led Class Actions

blockchain re-brands spawn class actionsSeveral large companies are forcibly redirecting their brands onto Blockchain Boulevard, but not all stockholders are on board, which has spawned some blockchain class action lawsuits. In this post, we take a look at one of these blockchain re-brands, in particular: Riot Blockchain, a company currently wading through legal fallout after its metamorphosis from biotech to blockchain.

Blockchain Re-brands: From Beverages, Bras, and Biotech to Blockchain

Back in the day, Long Island Ice Tea peddled flavored beverages in bright packaging. These days, the company changed its name to Long Blockchain Corp. and concentrates on “exploration of and investment in opportunities that leverage the benefits of blockchain technology.”

Same goes for Kodak and SkyPeople Fruit Juice.

Blockchain Re-brands: At First, Plaudits

Let’s get back to Bioptix — the brand transformer currently grappling with a blockchain class action.

When the company first announced its transition to token mining and acquisition, the market applauded. By the end of 2017, the company’s stock price had soared from $8 to $38. The future looked blockchain bright.

Blockchain Re-brands: The Fall

But the champagne toasts didn’t last long. Instead, the SEC came in hot with questions and concerns. Blockchain Riot’s stock price plummeted to about $10, which prompted some investors to pull the reins and prepare legal pitchforks.

And then news hit that John O’Rourke, one of the company’s head honchos, offloaded over 30,000 shares ($869,000) ten days after the stock hit its $46.80 zenith. (Denver Post)

But according to O’Rourke, it’s all a big misunderstanding. Tax and contractual purposes, he insists, were the impetus for his actions. “Basically, I sold less than 10 percent of my overall position. And I was doing it for tax obligations,” explained O’Rourke. “I could have sold more stock, but at the time, I sold what I needed,” he defended.

Blockchain Re-brands: The Class Actions

Soon after O’Rourke’s stock sales became public knowledge, litigation speculation tittered on the tongues of the commentator class.

Now, three different class actions are underway.

Did the company mislead investors about both O’Rourke’s moves and blockchain’s profit potential? That’s the class’ claim. Specifically, investors are concerned about “share-price manipulation through a dubious cryptocurrency pivot.” Additionally, shareholders seem anxious about executives’ ability to successfully transition the company. Were the principals deliberately hyperbolic about their understanding of the blockchain and crypto markets? According to the class, the plunging stock price raises the question.

“Riot lacked a meaningful business plan with respect to the cryptocurrency business and had only minimal investments in cryptocurrency products; the Company changed its name to Riot Blockchain, Inc. as part of a scheme to capitalize on public interest in cryptocurrency products, thereby driving up the Company’s stock price and enriching inside shareholders.”

Authorities Are Keeping A Sharp Eye On Businesses Doing A Blockchain Re-Brand

Riot Blockchain probably won’t be the only company weathering blockchain class actions. According to the Wall Street Journal, regulators are keeping a sharp eye on companies that“shift their business models to ‘capitalize on the perceived promise’ of the blockchain business.”

Connect With A Blockchain Lawyer

The Gordon Law Group works with businesses and individuals on various cryptocurrency tax and blockchain business matters. Got a legal question or quandary involving a digital currency, smart contract, or other blockchain components? We can help. We also work with blockchain startups on compliance matters.

Get in touch today. Let’s get to work.

FTC Cryptocurrency: Marketing Rules Apply

FTC cryptocurrency lawyerThe FTC is going after four people for allegedly promoting “deceptive money-making schemes involving cryptocurrencies.” According to commissioners, the accused promised dramatic gains and delivered squat.

FTC Cryptocurrency: Token Investment Ponzi Scheme?

The FTC accused three defendants of creating a crypto pyramid scheme that promised “big rewards for a small payment of bitcoin or Litecoin.” Specifically, the business’ marketing materials tempted potential investors to turn $100 into $80,000 a month. To join, participants had to make a payment to extant investors. As such, the scheme’s success relied on a constant stream of new investor recruits.

According to the FTC, the scheme leaped out of Ponzi’s playbook, in large part because “the majority of participants would fail to recoup their initial investments.”

When asked about the Crypto Ponzi case, the acting director of the FTC’s Bureau of Consumer Protection Tom Pahl explained :

“This case shows that scammers always find new ways to market old schemes, which is why the FTC will remain vigilant regardless of the platform – or currency used. The schemes the defendants promoted were designed to enrich those at the top at the expense of everyone else.”

FTC Cryptocurrency: Promotional Language Matters

In these recent FTC cryptocurrency actions, commissioners also objected to promotional assertions about doubling your money in 50 days. Remember: Don’t publish guarantees that your business can’t fulfill — it’s against FTC regulations (link). When it comes to marketing materials, faking it till you make it is not OK. All advertising claims must be factually supported with evidence.

While these cases wend their way through the courts, the FTC froze the defendants’ assets and issued temporary restraining orders.

Connect With An FTC Cryptocurrency Lawyer

The cryptocurrency and blockchain markets are relatively young, mostly unregulated, and growing like a Chia Pet on steroids.  If you’re a startup or investor in the space, it’s wise to consult with a cryptocurrency attorney before making moves or launching a project. Though specific industry regulations are currently in limbo, some standing financial, promotional, and business regulations absolutely do apply.

We have been consulting — and investing — in the virtual currency space since the early days of Bitcoin. Moreover, as both attorneys and CPAs, our firm has a unique, holistic, and more nuanced understanding of the crypto ecosystem.

Give us a ring. Let’s talk about what our experienced cryptocurrency legal team can do for you.

Illinois Blockchain: State Bets Blockchain Can Kill Entitlement Fraud

Alaska and Idaho issued crypto investment cautions; New York and Washington went the registration route; Delaware and New Hampshire scrambled to seduce fintech startups.

And for its part, Illinois is envisioning a blockchain-fueled future…to slash bureaucracy.

Illinois Blockchain: Lawmakers Careful Not To Scare Away Fintech

“New York went in and over-regulated (cryptocurrencies) and what ended up happening was a lot of those companies left the state,” explained Illinois State Representative Jaime Andrade.

“With myself and [Rep.] Zalewski working on this together, I think we will be able to make sure we protect the consumer, but at the same time…make sure the state of Illinois is an inviting environment for this type of technology.”

Mr. Zalewski continued:

“We are under tremendous pressure in this state to make government more efficient. This technology has the opportunity to help remake government. That’s what we’re interested in. The goal of this is not to regulate it in a way that’s going to make people uncomfortable to use it in the future.”

Could Blockchain Technology Crack Down On Entitlement Fraud, Increase Efficiency and Enhance Privacy?

Currently, a task force is exploring how Illinois can leverage blockchain technology to improve inter-government operations. Mainly, they’re considering platforms and programs to manage state resident IDs. The group is also looking at ways to mitigate entitlement fraud via tokenized assets.

If the idea germinates into legislation, residents would store private identifiers — like tax records, voting history, and drivers licenses — as personal nodes on a blockchain database. This way, individuals could control what they shared and didn’t share.

The report states:

“This new model would reimagine the relationship between state and individual, as government would become the verifier, rather than the custodian of people’s public service identity. Government would move from providing data storage to verifying identity, allowing users to store access to personal data securely on devices.”

Connect With An Illinois Blockchain Lawyer

Do you have blockchain or cryptocurrency legal questions? There’s a good chance we have the answers.

Gordon Law Group works with entrepreneurs, startups, and businesses in the fintech niche. Our team performs compliance analysis, purchase consultations, cryptocurrency tax calculations, and more.

Get in touch today. Let’s figure out how our cryptocurrency legal team can help you.

Article Sources

Kelso, C. E. (2018, January 05). United States of Bitcoin: Illinois Gives Crypto Love While Other States Hate. Retrieved February 28, 2018, from https://news.bitcoin.com/united-states-of-bitcoin-illinois-gives-crypto-love-while-other-states-hate/

Zhao, W. (2018, February 02). Illinois Eyes Blockchain for IDs and Public Asset Management. Retrieved February 28, 2018, from https://www.coindesk.com/illinois-eyes-blockchain-for-ids-and-public-asset-management/

Should Cryptocurrency and Blockchain Startups Be Eyeing Belarus?

Belarus cryptocurrency tax advantages
Belarus wants to become a cryptocurrency hub. Would it work for your startup?

Belarus’ looooooooooong-time president, Alexander Lukashenko, is re-branding himself as a pioneering cryptocurrency politician. Lukashenko, who has retained power in the former Soviet enclave for over 24 years, declared that “Belarus will become the first government in the world that opens wide opportunities for the use of blockchain technology.” Vsevolod Yanchevsky, one of the country’s tech luminaries, is also sold on the idea, raving in a recent interview, “Belarus will be one of the best jurisdictions in the world for cryptocurrencies and blockchain.”

Belarus to Blockchain and Cryptocurrency Startups: Incorporate Here and We’ll Wave Your Taxes

So, what is Lukashenko’s plan to transform Belarus into a digital currency kingdom? Easy:

Lukashenko seems confident in the vision, optimistically opining: “We have every chance of becoming a regional center in this area.”

Visions of ICOs are also dancing in the leader’s head, and his government is already contemplating ways to thwart would-be crypto criminals, including capital requirements and smart contract standards.

Could Belarus’ Cryptocurrency Dreams Become Reality?

Does Belarus have a shot at turning this idea into reality?

It does.

Over the past decade, several of the post-Soviet states have made significant technological strides. Especially Belarus; it’s home to World of Tanks, the phone messaging system Viber, and EPAM Systems. Alphabet — Google’s holding company — has even snatched up several Belarus startups.

Praise established, Belarus’ plan could also hit some roadblocks, due to conflicting statutes and the current global political climate.

Legal Options For Cryptocurrency Companies

Is your blockchain or cryptocurrency business at a crossroads? Trying to decide where, what, when, and how?

Our digital currency legal team can help. We’ll figure out everything from the best place to incorporate, ICO particulars, and even the ideal tax reporting plan.

Gordon Law Group maintains Internet law, tax, accounting, and cryptocurrency divisions — making us an ideal choice for exchanges, wallets, established fintech businesses, and blockchain startups.

Get in touch today to begin the conversation.

Article Sources

Kudrytski, A. (2017, December 22). Europe’s last dictator wants to be its cryptocurrency king. Retrieved January 31, 2018, from http://www.smh.com.au/business/markets/europes-last-dictator-wants-to-be-its-cryptocurrency-king-20171222-h09m14.html