On July 25, 2017, the Securities and Exchange Commission (“SEC”) issued a Report of Investigation (“Report”) finding that the digital tokens offered and sold by the virtual, unincorporated organization known as “The DAO” were securities subject to the federal securities laws.
Before the notorious hack, The DAO sold DAO tokens in exchange for the digital currency Ether used on the Ethereum blockchain. The DAO expected to use the estimated $150,000,000 in Ether it raised to fund digital projects, while purchasers of the DAO tokens expected a return on their investment by sharing in the earnings from the funded projects. It all ended up in shambles.SEC and DAO
The regulators are slowly creeping into the crypto space. Before the S.E.C. Investigative Report and its findings, the I.R.S. has issued a notice stating that “virtual currencies are treated as property for U.S. federal tax purposes.”
Bitcoin attorney, Adam S. Tracy , J.D., M.B.A. is an international authority in the law of blockchain and taxation. Contact us at 1.888.978.9901 or get in touch with us online if you are in need for help in any aspect cryptocurrencies related prosecution.