When it rains, it pours.  On January 23, 2023, the New York Department of Financial Services announced that it had issued certain Guidance on Custodial Structures for Customer Protection in the Event of Insolvency in which it emphasized the importance of sound custody and disclosure practices to protect customers in the event of an insolvency…

The organizers of an initial coin offering (ICO) recently won dismissal of an investor’s fraud claims by establishing that their public risk disclosures negated the investor’s claims of reliance on alleged misstatements.  The project, a video service provider’s ICO, was governed by a purchase agreement called a “Simple Agreement for Future Tokens” (“SAFT”).   The plaintiff…

Demand for virtual currency services, including custody services, has soared in the past several years.  Like their counterparts in traditional finance, these custodians are stewards of retail and institutional customer funds and serve an important and valuable function.  However, as evidenced by a number of headline-grabbing failures during the lingering crypto winter, inadequate disclosures and…