Shocking as it may sound, the venture capital industry is built on the idea that it doesn’t really matter if most of the companies they fund lose money or go belly-up. Could this be because they often turn hot air into fabulous profits and cash out before the balloon bursts? Even when that is not the intended “play,” venture capitalists typically prioritize growth over business fundamentals or helping the community, despite generating negative externalities not only for other companies but also for the financial markets. At least that’s how it’s been until now. The new tech in town, built on …

The co-founders of Bidooh, a British digital advertising firm, admitted to stealing intellectual property from their own company with the intention of selling it to third-parties. The firm created facial analytics software for use in advertisement, after ending a $3 million initial coin offering, or ICO, in 2018. As reported on April 20 by Prolific North, a U.K. local news outlet, Bidooh’s co-founders, Abdul Alim and Shahzad Mughal, were accused of creating a clone of their own company and selling Bidooh’s products to third parties. This was likely done to avoid sharing revenue with other Bidooh shareholders. In August 2019, …

An unnamed investment firm dubbed ‘Investor Z’ is one of almost a dozen firms battling the U.S. Securities and Exchange Commision (SEC) to keep their Gram token investment strategies secret. The 11 investment firms want their proprietary analyses of the Telegram initial coin offering (ICO) to be redacted from the case. Investor Z argued that divulging their strategies is like publicly revealing the recipe for Coca Cola. The long running case has seen the SEC granted an injunction against the worldwide distribution of Grams as they have been deemed securities under US law. VC firms want strategic analysis sealed On …

The United States-based Blockchain Association has filed an amicus curiae brief in support of Canadian messenger Kik amid the firm’s legal battle with the Securities and Exchange Commission. The association addressed the April 17 brief to the court which is considering the case, asking it to deny the SEC’s motion for summary judgment and decide the case narrowly to avoid casting doubt on cryptocurrency projects that have yet to appear before the court. In March, the SEC requested summary judgment, claiming that it possessed “undisputed evidence” that Kik’s ICO distributed unlicensed securities. Not the same as Telegram’s case Basically, the …

The Inland Revenue Authority of Singapore, or IRAS, issued updated tax guidance for digital tokens on April 17. The guidelines concern payment tokens, utility tokens, security tokens, and tokens issued through initial coin offerings, or ICOs. Fluctuations in the value tokens held by miners, ICO issuers, businesses, and individuals are not taxable or deductible unless realized. Businesses handling tokens receive usual treatment Despite emphasizing that payment tokens are not legal tender, Singapore’s new guidelines state that transactions executed using payment tokens “are viewed as barter trade.” When receiving payment tokens, a business will incur normal tax obligations based on the …

Binance founder and chief executive, Changpeng Zhao, took aim at initial public offerings, or IPOs, and venture capital fundraising while speaking at the recent BlockDown 2020 conference. Despite the recent decline in crypto investment, Changpeng Zhao, or CZ, expressed confidence that the blockchain fundraising markets will produce exponential growth in the coming years, emphasizing the boom and bust cycles of investment into other tech industries. IPOs leave the public ‘holding the bag’ Speaking at BlockDown 2020 on April 16, CZ described distributed ledger technologies, or DLT, as driving creative destruction in global fundraising practices, arguing blockchain fundraising has allowed individuals …

The United States Commodity Futures Trade Commission (CFTC) has filed a complaint against Florida resident Alan Friedland for fraudulently raising $1.6 million through a cryptocurrency tied to a forex trading scheme. The April 16 filing accuses Friedland and his companies Fintech Investment Group, Inc and Compcoin LLC of illegally soliciting investments and publishing “untrue and materially misleading” press materials for its digital asset Compcoin from 2016 until 2018. ‘Proprietary trading algorithm’ The defendant claimed that Compcoin would allow customers to access Fintech’s proprietary trading algorithm ART and would deliver high returns on investment. Friedland falsely claimed that ART’s profit potential …

In a continuation of ATBCoin’s class action lawsuit over its $20 million dollar Initial Coin Offering, or ICO, the lead plaintiff has filed to settle the case for 1.5% of the total raised. While ATB Coin claimed that its blockchain would be the fastest in the world, ATB’s launch revealed that its technology could not out-perform other ledgers. $20M ICO Suit to Settle for $250,000 In a motion for preliminary approval filed on April 10, the lead plaintiff in the suit, Raymond Balerta, has filed for a $250,000 settlement. The lawsuit accused ATBCoin of failing to file a registration statement …

Gibraltar’s minister for digital and financial services, Albert Isola, has announced forthcoming regulations to reduce market manipulation among blockchain firms. In an interview with The Banker published April 10, Isola also discussed his government’s decision to abandon its development of a legislative apparatus for token sales amid the bursting of the initial coin offering, or ICO, bubble. Gibraltar responds to market manipulation in DLT sector Isola states that Gibraltar’s government will introduce regulations to mitigate market manipulations in the blockchain sector “in the next few months.” The minister describes manipulation as an “increasing risk” among distributed ledger technology (DLT) companies, …

Youtube and Mailchimp appear to be continuing their policy of indiscriminate bans in the crypto sphere. The Blockchain Education Network, or BEN, a registered 501(c)(3) non-profit organization, saw its Mailchimp account temporarily restricted due to alleged violations of its terms of use. According to a tweet published on April 9, Mailchimp’s automated scanning tool concluded that BEN violates its “acceptable use” policy, which notably restricts marketing of initial coin offerings, or ICOs. The non-profit pointed out that it does not promote ICOs in any way, and noted that this ban adds on top of a similar restriction from Youtube. Specifically, …

Prosecutors have paused a United States Securities and Exchange Commission (SEC) lawsuit against the alleged operators of a $30 million fraudulent ICO amid concerns that proceedings may impact the integrity of a parallel investigation into the defendants. The United States attorney’s office for New Jersey intervened in the case on April 2. SEC suit paused amid integrity concerns over the parallel investigation The SEC action against defendants Boaz Manor, Edith Pardo, and the associated companies CG Blockchain Inc and BCT Inc has been halted to maintain the integrity of parallel criminal investigations into the pair’s scheme. The prosecutors argued that …

A New York judge has ruled that the injunction barring Telegram from issuing its Gram tokens extends to all entities in the United State and overseas. On April 1, U.S. District Judge P. Kevin Castel, responded to the encrypted messaging firm’s request for clarification as to the scope of the court’s March 24 preliminary injunction. He denied Telegram’s move to distribute tokens to the non-US-based participants of its 2018 initial coin offering (ICO). Approximately $1.27 billion of the funds raised to finance the development of the Telegram Open Network (TON) came from overseas-based investors Judge Castel sides with SEC The …