Cryptocurrency

Multiple U.S. .gencies assert authority over cryptocurrencies:

• - The Securities and Exchange Commission (SEC) treats certain tokens as securities under the Howey Test.

- The Commodity Futures Trading Commission (CFTC) oversees derivatives and commodities markets involving digital assets.

- The Financial Crimes Enforcement Network (FinCEN) enforces AML (Anti-Money Laundering) rules under the Bank Secrecy Act (BSA).

- The Internal Revenue Service (IRS) classifies cryptocurrencies as property, imposing capital gains taxes on transactions.

SJKP LLP assists clients in interpreting how these overlapping regimes apply to their business models, ensuring compliance across all relevant agencies.

In addition to federal oversight, many states impose their own money transmission and virtual currency licensing requirements. For example, New York’s BitLicense and similar frameworks in California and Florida mandate strict operational and cybersecurity standards. We help clients assess whether licensing is required, prepare filings, and design internal compliance systems that satisfy both state and federal expectations.

Cryptocurrency is inherently borderless, but the law is not. We guide multinational clients in harmonizing compliance obligations across jurisdictions, addressing issues such as cross-border AML reporting, OFAC sanctions compliance, and adherence to FATF travel rule standards.

Our attorneys conduct detailed token classification analyses based on the token’s functionality, marketing, and network design. By applying tests established by the SEC, CFTC, and federal courts, we help clients determine whether their tokens qualify as:

• - Securities tokens (subject to SEC registration or exemption)

- Commodity tokens (governed by CFTC regulations)

- Utility tokens (used for network participation or access)

A correct classification from the outset protects clients from enforcement actions and builds investor confidence.

We assist clients in structuring Initial Coin Offerings (ICOs), Security Token Offerings (STOs), and Private Placements under Regulation D, Regulation S, or other exemptions. Our counsel ensures that offering materials, investor disclosures, and marketing practices align with U.S. .ecurities law while maintaining operational flexibility for global participation.

Legal enforceability remains crucial in decentralized ecosystems. SJKP LLP advises on the legal implications of smart contracts, DAO governance, and token-holder voting rights, ensuring that decentralized systems maintain accountability, transparency, and compliance with applicable laws.

We help exchanges, DeFi platforms, and wallet providers design FinCEN-compliant AML programs, including policies for:

• - Customer due diligence (CDD) and beneficial ownership verification

- Suspicious activity reporting (SAR) procedures

- Transaction monitoring and recordkeeping

- OFAC sanctions screening and blockchain analytics integration

These programs protect both institutional integrity and consumer trust.

Our team represents clients in regulatory audits and investigations initiated by the SEC, CFTC, DOJ, or state agencies. We prepare responses to subpoenas, negotiate settlements, and develop corrective compliance plans that minimize financial and reputational damage.

Beyond compliance, exchanges must safeguard user assets and data. SJKP LLP advises on custodial frameworks, insurance arrangements, and cybersecurity policies that align with evolving federal and state requirements, protecting both investors and operators from systemic risk.

Under IRS guidance, cryptocurrency is treated as property, meaning each transaction, whether sale, exchange, or payment, can generate a taxable event. Our tax attorneys assist individuals and corporations in:

• - Calculating capital gains and losses

- Reporting transactions on IRS Form 8949 and Schedule D

- Managing Form 1099-DA compliance for exchanges and brokers

- Structuring entities to optimize tax efficiency

Global operations often trigger FATCA reporting and FATF travel rule requirements. We guide multinational clients in implementing protocols for transaction traceability and record retention, ensuring compliance with cross-border information-sharing standards.

Cryptocurrency is now a recognized asset class in estate planning and corporate balance sheets. We help clients document ownership, design succession structures, and address custody and transfer risks associated with crypto-based estates or corporate treasuries.

SJKP LLP represents clients facing investigations related to unregistered securities offerings, market manipulation, and fraud allegations. We engage directly with SEC enforcement divisions and DOJ prosecutors, preparing detailed responses, defending against charges, and pursuing favorable settlements or dismissals.

We defend companies and executives in class actions and shareholder lawsuits arising from token sales or exchange practices. Our approach blends aggressive advocacy with a strategic focus on dispute resolution and reputational preservation.

Our firm also conducts internal audits and compliance reviews to detect and mitigate potential violations before they escalate. By identifying weaknesses early, we help clients strengthen internal controls and demonstrate proactive compliance to regulators.