Hunton Andrews Kurth LLP
May 23, 2014 - D.C.
Recent Developments in the Regulation of Bitcoin Under State and Federal Securities Laws
by Scott H. Kimpel
As the author explains, regulators in the U.S. are increasingly not shy about applying old-fashioned regulations to the modern innovation known as "Bitcoin."
The advent of Bitcoin and other virtual currency in recent years is the latest example of a new technolofy emerging with the potentital to disrupt traditional ways of doing business. As with other technological innovations that initially outpace regulation, the regulatory environment around the treatment of Butcoun has been rapidly evolving. And like other regulators who have begun to interpret existing regulations in the context of virtual currency, the Securities and Exchange Commission ("SEC") and state securities regulators have begun to apply traditional securities regulations to Bitcoin.
WHAT IS BITCOIN?
Bitcoin is a peer-to-peer, network-based virtual currency introduced as open source software in 2009 by an unknown person or persons using the pseudonym Satoshi Nakamoto. By using third-party services, users of Bitcoin are able to buy, sell or accept bitcoins from anywhere in the world. These users can purchase goods or services using Bitcoin, they can buy and sell Bitcoin like a commodity, and they can convert Bitcoin into traditional currencies like the U.S. dollar.
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