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Jason Weinstein conducts internal investigations and represents companies and individuals in high-profile criminal matters. With 15 years of experience in senior positions at the US Department of Justice (DOJ), he helps corporations and boards successfully navigate challenging government enforcement matters and defends individuals in criminal investigations and prosecutions. He is recognized across the United States as an authority on legal and regulatory issues involving digital currencies and blockchain technology. Jason serves as co-chair of Steptoe's White-Collar and Securities Enforcement and the Blockchain and Cryptocurrency practices. Read Jason's full bio.

This summer, US and international regulators have brought enforcement actions, issued guidance and explanatory documents, and sharpened previously-taken positions regarding regulation of cryptocurrency and crypto-tokens under the anti-money laundering, derivatives, securities, and tax laws. These actions provide a better sense of the way in which US regulators will approach the blockchain and digital asset space

On July 26, 2017, the Financial Crimes Enforcement Network (FinCEN) of the US Department of the Treasury assessed a civil monetary penalty of $110,003,314 against Canton Business Corporation (BTC-e), one of the largest virtual currency exchanges by volume in the world, and a $12,000,000 penalty against Alexander Vinnik, a Russian national who allegedly controlled, directed, and supervised BTC-e’s operations, finances, and accounts. On the same day, a 21-count criminal indictment against BTC-e and Mr. Vinnick was unsealed, and Mr. Vinnick was arrested in Greece.

This is the second supervisory action that FinCEN has taken against a virtual currency exchanger, and the first against a foreign entity operating as a money services business (MSB) with activities in the United States. FinCEN’s action also imposes the second highest civil monetary penalty assessed against an MSB to date. FinCEN has increasingly brought enforcement actions against MSBs and other non-traditional financial institutions, and similar actions seem likely in the future.

Continue Reading Significant FinCEN Action Against BTC-e, Implications for Virtual Currency Exchangers

In the last installment of our five-part blockchain series, we focus on the insurance industry.  Insurance and reinsurance companies are actively exploring and developing applications for blockchain technology.  And for good reason – distributed ledger technology has the potential to revolutionize the way insurance companies operate and engage with their policyholders and to open a window into new products and new markets.

At the retail level, the blockchain promises to benefit both the consumer and insurer by simplifying the claims process, increasing efficiency of underwriting and claims handling, improving risk management, and reducing operational costs.  The blockchain will help ensure the security of private or confidential information, improve auditability and transparency, and increase effectiveness in fraud detection.  These enhancements will also help lead to an improved customer experience.

Continue Reading Insurance with Assurance

Imagine a world where you could easily register and claim ownership over your original creative works – from music to photos to blogs. Gone would be the days of seeing your work duplicated all over the internet without proper credit and having no way to prove ownership. With the use of blockchain technology, that world is not so far away. Distributed ledger technology promises to transform the way intellectual property rights are established and enforced – and the way IP creators are compensated.

Before joining Steptoe, I oversaw the Justice Department’s IP criminal enforcement program.  In that role, I worked closely with others in law enforcement and with the content industry – from film and television to publishing to music – in an effort to try to stop piracy and to ensure that artists and creators of all types of IP were protected.  At that time, the world was just beginning to hear about Bitcoin but had yet to discover the many other applications for blockchain technology that go far beyond digital currencies.

Today, however, as “blockchain” is on its way to becoming a household word, we’re poised for a revolution in the protection of all types of IP.  That’s because the blockchain can be used to control and track the distribution of protected IP.  By putting IP on the blockchain, creators would have an immutable, secure, time-stamped record of the creation and distribution of their works.  In addition, it can be used to establish and enforce licenses for IP through smart contracts and even to transmit payments in real-time to IP owners.

Continue Reading Can the Blockchain Block IP Theft?

This week, we will have a five-part series highlighting the legal issues presented by blockchain applications in a number of different industries. Today, we’re looking into the legal considerations of implementing the blockchain in the pharmaceutical industry.  Among other benefits, distributed ledger technology can help reduce sales of counterfeit drugs and improve supply chain management, increase the security of digital patient records, improve processing of health insurance claims, and enhance the reliability and accuracy of clinical trials.

One of the biggest problems in the pharmaceutical industry is the proliferation of counterfeit drugs, which are increasingly difficult to detect and regulate.  Sales of counterfeit pharmaceuticals are a billion-dollar business, and pharmaceutical companies invest enormous resources in sophisticated efforts to prevent and investigate counterfeiting of their products all over the globe.  But the impact of this problem goes far beyond dollars and cents – because it places consumers’ lives directly at risk.

Continue Reading This is Your Blockchain on Drugs…

Anyone who has tried to explain bitcoin around their kitchen table knows that it is not easy to put your finger on what exactly the technology is.  Because of their innovative nature, digital currencies don’t have obvious analogs or fit easily into existing categories.  Bitcoin is part currency, part digital payment system, and part immutable ledger.

This confusion is not merely academic.  How digital currencies are defined determines how they are regulated.  For instance, the Internal Revenue Service (IRS) determined that bitcoin is a form of property, not currency, for tax purposes.  The Commodity Futures Trading Commission (CFTC) labeled bitcoin a commodity.  Could the Securities and Exchange Commission (SEC) decide that bitcoin is a form of security?

Continue Reading Are Bitcoin and Other Digital Currencies Securities?

Following the attacks in Paris and San Bernardino, polls show that Americans identify terrorism—more than any other issue—as the most important problem facing the US.  In this environment, some media outlets have predicted a pending “crackdown” on digital currencies, particularly by European governments, because of the risk that the technology could be used to fund terrorism.

But do digital currencies like bitcoin actually pose a unique threat when it comes to funding terrorist networks?  Jason Weinstein published a post on Medium earlier this week—“Combating Bitcoin Use by Terrorists?”—that seeks to answer this question.

Continue Reading Bitcoin and Terrorist Financing