The Securities and Exchange Commission (“SEC”) will likely amend 17 CFR § 240.10b5-1 (“Rule 10b5”). (Peter Rasmussen and Preston Brewer, Bloomberg Law). The SEC introduced Rule 10b5 more than twenty years ago to provide clarity on insider trading. Id. . .
Read MoreThe ongoing federal prosecution of fallen biotech wunderkind Elizabeth Holmes showcases the dangers investors—along with patients and doctors—face as companies make encouraging promises in a climate of rapidly emerging technology. Elizabeth Holmes dropped out of Stanford University and founded Theranos, Inc. (“Theranos”) in 2003 seeking to “revolutionize the blood-testing industry.” (Sara Randazzo, The Wall Street Journal; Eric Mack, CNET; Daniel Thomas, BBC News). The Silicon Valley firm claimed to be developing technology that required a smaller draw of blood than traditional lab tests and touted the convenience of using its test kits compared to sending samples into lab centers. (Eric Mack, CNET). After crafting partnerships with healthcare and consumer giants Walgreens Boots Alliance and Safeway, Inc., Theranos’ valuation skyrocketed to a peak of approximately $10 billion. (Sara Randazzo, The Wall Street Journal; Zaw Thiha Tun, Investopedia). Then, in 2015, a whistleblower alerted the Wall Street Journal to Theranos’ allegedly deceptive practices. (Sara Randazzo, The Wall Street Journal). . .
Read MoreEvery movement needs a leader, and it seems the cannabis industry has found one in U.S. Representative Ed Perlmutter of Colorado. He is the sponsor of the Secure and Fair Enforcement Banking Act of 2021 (“SAFE”), a legislative bill that would provide cannabis businesses with improved access to mainstream banking services. (Kyle Jaeger, Marijuana Moment). In April, the House approved SAFE by a vote of 321 to 101. (The Office of Representative Ed Perlmutter). SAFE now sits in purgatory while the U.S. Senate debates its merits. (Christopher Butler, Boston.com). This post examines the impact SAFE would have on the cannabis industry in the context of the industry’s current standing in the realm of public opinion and under current legal structures. . .
Read More“DeFi” is short-form for decentralized finance, a method of executing financial transactions without the middlemen—brokerages, exchanges, banks, and other intermediaries. (Devine, US News). An understanding of yield farming cannot be achieved without first understanding the term DeFi. In the purest sense of the term, DeFi “must have no centralized control but run autonomously on a blockchain through the use of smart contracts.” Id. These smart contracts are “bits of code that perform actions once certain conditions have been met,” self-executing when specific outcomes occur. Id. Generally, DeFi has come to be known as the term for “any application or business that uses blockchain technology or cryptocurrency to create alternative financial products.” Id. One practice catching the attention of the SEC is yield farming, a method of lending crypto currency to which the SEC believes federal securities regulations apply. (Kharif, Bloomberg Law). . .
Read MoreAlthough digital currencies have been the hottest topic in the blockchain area for several years, investors are increasingly turning their attention to a digital asset that is valuable for the item it represents rather than for its potential use as a currency. Non-fungible tokens (“NFTs”) are digital versions of artwork, music, trading cards, autographs, and other collectibles that are secured on a blockchain and purchased using a recognized cryptocurrency, such as Ethereum or Bitcoin. (Robyn Conti and John Schmidt, Forbes Advisor). However, unlike cryptocurrencies, every NFT has its own digital signature, which makes them impossible to copy and thus significantly enhances their value. Id. . .
Read MoreDue to the growing obsession with decentralized finance (“DeFi”) and tighter governmental regulation over cryptocurrency products, Decentralized Autonomous Organizations (“DAOs”) have emerged as a novel attraction. (Joon Kim & Daniel Forester, Bloomberg Law; Cathy Hackl, Forbes). DAOs are run autonomously and give individuals a safe and effective way to work with like-minded people around the world. (Cathy Hackl, Forbes; Ethereum). A DAO’s control and governance functions are distributed horizontally across its members, which eliminates the need for a central authority and thus makes them attractive to DeFi enthusiasts. . .
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