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SEC Targets ICOs, IRS Updates Crypto FAQs, UK Tax Agency Seeks Blockchain Analytics Tool – Mondaq News Alerts

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SEC Targets ICOs, IRS Updates Crypto FAQs, UK Tax Agency Seeks Blockchain Analytics Tool

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Late last week, the Securities and Exchange Commission (SEC)
charged Mr. Boaz Manor, Ms. Edith Pardo and two related entities,
CG Blockchain Inc. and BCT Inc. SEZC, for violating federal
securities laws when raising more than $30 million from hundreds of
investors in a fraudulent initial coin offering (ICO). The SEC
alleges that the defendants falsely claimed to have 20 hedge funds
testing their technology to record transactions on a blockchain,
when, in fact, the defendants only sent a prototype to a dozen
funds, none of which used or paid for it. In addition, the
complaint describes how Manor, a convicted criminal, hid his
identity and criminal past from investors by changing his physical
appearance and using an alias. The U.S. Attorney’s Office
announced criminal charges against Manor and Pardo in a parallel

The SEC filed another ICO-related complaint this week against
Opporty International Inc. and its founder and owner, Mr. Sergii
Grybniak. The SEC alleges that the defendants’ ICO constituted
an unlawful, unregistered securities offering, and that the
defendants made false and misleading statements to investors,
including that the ICO was “100% SEC compliant.”

The Internal Revenue Service (IRS) recently updated its
Frequently Asked Questions page on its website to address the
responsibilities and reporting obligations for charitable donations
made with cryptocurrency. The guidance provides that a charitable
organization that receives virtual currency should treat the
donation as a noncash contribution. It also describes donor
acknowledgment responsibilities for donations of more than $5,000
in cryptocurrency, leading some analysts to conclude that
high-value cryptocurrency donations must be appraised.

The U.K.’s tax agency, Her Majesty’s Revenue and
Customs, recently requested proposals for a blockchain analytics
tool to help combat illegal cryptocurrency trading. According to
the agency, the tool would “support intelligence-gathering
methods to identify and cluster crypto-asset transactions into
linked transactions and identify those linked to crypto-asset
service providers.” The agency is willing to spend
£100,000 to license the tool. Proposals are invited until
Jan. 31 of this year.

For more information, please refer to the following links:

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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