Securities regulators around the world are examining the extent to which
digital currency activities and platforms are within the scope of their jurisdiction. Most
regulators take the position that the extent of their oversight authority is entirely
dependent on the actual functional activities of the digital currency system operations.
In some jurisdictions, digital currency operations deemed to be electronic services or
financial product offerings are subject to oversight. Key participants in the virtual
currency community, such as Overstock.com and LedgerX, are increasingly taking the
position that they will pursue full compliance with existing regulatory requirements to
the extent that their digital currency operations fall within the scope of existing
regulation. This approach is prudent and likely to facilitate growth of the virtual
currency market. The approach does, however, require extensive legal compliance
activity.
Keywords: Australia, California, China, Denmark, electronic services, financial
products, financial services, fraud, LedgerX, New York, Overstock.com, Ponzi
scheme, Securities and Exchange Commission, Shavers case.
