Morrison Cohen LLP | Digital Assets

A leader in crypto-asset, fintech, blockchain and cryptocurrency disputes.

Morrison Cohen was an early arrival in the digital assets world, representing the defendants in the first case brought by the SEC’s then-newly formed Cyber Unit in 2017. Since then, our dedicated Digital Assets team has represented some of the largest and most significant cryptocurrency companies and DeFi projects in public litigation, non-public regulatory enforcement actions, regulatory advisory work, legally compliant token offerings, digital asset fund formation, corporate structuring and more. We maintain the industry’s definitive Cryptocurrency Litigation Tracker, a publicly available, comprehensive resource that follows regulatory actions and pronouncements, private litigation and other events of interest in the cryptocurrency space.

With our exceptional depth of experience and comprehensive understanding of cryptocurrency, blockchain and other digital assets, we handle the complex, often first-in-kind matters that the digital assets industry faces. Our team skillfully guides our clients – software developers, DeFi companies, trading companies, exchanges, DAOs, cryptocurrency and token issuers, stablecoin issuers, DAO grants programs, investment managers, liquid hedge funds and individual investors – through the evolving and complicated landscape of the trillion-dollar crypto sector.

Bankruptcy, Restructuring & Governance: Our lawyers have been fully integrated into the Digital Assets Practice to represent major participants in virtually all of the major crypto bankruptcy cases.

Business Litigation: Clients engage our representation in cases involving alleged statutory violations, cryptocurrency conveyance and ownership, valuation, contracts, fraud allegations, employment and other complex commercial disputes. We have also litigated multiple cases involving novel legal issues or issues of first impression. We have repeated and proven experience in federal court, state court and arbitration venues across the U.S., where we explain our clients’ sophisticated businesses in ways that judges, arbitrators and regulators appreciate and understand.

Corporate: We provide comprehensive counsel in connection with the formation and structuring of cryptocurrency or DeFi-related companies and other platforms such as NFT marketplaces, including advising on the particular issues involved with DAOs. Clients also call upon us to assist with early-stage capital raising and equity and debt financing, including token offerings that comply with the securities laws. We also regularly conduct regulatory diligence on the cryptocurrency and blockchain aspects of investments and M&A transactions, including in conjunction with other firms who call upon us for our detailed knowledge in this area.

Executive Compensation and Employee Benefits: Our Executive Compensation and Employee Benefits lawyers negotiate, draft and implement our clients’ employment arrangements and incentive compensation plans, including advising on tokens as part of compensation.

Investment Funds & Advisers: We have deep experience in the formation and structuring of funds that will invest in the digital asset space, and other investment vehicles that touch the industry. Our combination of traditional fund formation (hedge funds and private equity) and the latest cryptocurrency knowledge enables us to advise our clients not only on the capital-raising side, but also on the deployment of assets in the digital asset space, making us a great choice for digital assets-related funds.

Technology, Data & IP: Our experienced IP and technology lawyers are equipped to handle all transactional aspects of digital assets, including the issuance, purchase and sale of NFTs. Clients value our meticulous focus on clearly defining the rights conveyed with each NFT and drafting terms of sale and other required transactional documentation. Our group is well positioned to identify and address NFT matters that go beyond IP issues and into securities laws, and advise accordingly. Our data privacy and data protection team helps clients understand the ever-evolving data landscape in the digital asset world with a deft hand and careful attention to regulatory requirements. Our deep understanding of the underlying technology behind digital assets is crucial to making sense of the complex and sometimes conflicting laws that have not yet caught up with commercial developments in this space.

White Collar & Regulatory Enforcement: We provide cutting-edge defense for major digital assets and crypto companies in investigations and enforcement actions conducted by regulators, including the SEC, CFTC, Department of Justice, New York State Office of the Attorney General, FINRA and multiple other state attorneys general and securities regulators. In addition, domestic and foreign projects rely on our counsel on blockchain and cryptocurrency law relating to litigation, regulatory risk and compliance of securities, commodities, money transmission and other issues.

Recognition

Chambers USA ranked Morrison Cohen’s Digital Assets Practice and Partner Jason Gottlieb in its FinTech Guide 2023 (USA). Both the practice and Jason, the department chair, were ranked in Band 2 under Crypto-Asset Disputes and in Band 3 under FinTech Legal: Blockchain & Cryptocurrencies.

Experience

Some of our department’s key representations in the digital assets space have included:

White collar and regulatory enforcement defense

SEC
- Counsel for dozens of Web3 development companies and Foundations in non-public SEC investigations, including several through a Wells process, which concluded with no enforcement action
- Counsel for the “Debt Box” defendants in a case brought by the SEC in federal district court, which ended after the SEC was held in contempt and voluntarily dismissed its case
- Counsel for Genesis Global Capital, LLC in SEC enforcement action in federal district court relating to lending and borrowing activity
- Counsel for Jonathan Mann and Brian L. Frye in a preemptive suit against the SEC seeking a declaratory judgment that their proposed NFT projects do not violate federal securities law
- Counsel for a non-custodial wallet application developer in SEC Wells process
- Counsel for company offering AI-based financial and market research software in a SEC investigation
- Counsel for a California cryptocurrency hedge fund in an SEC investigation (obtained letter of non-enforcement)
- Counsel for several cryptocurrency issuers (in the United States and abroad) in various SEC investigations regarding token issuance
- Counsel for several individual software developers in connection with the SEC’s “Eth 2.0” investigation
- Counsel for the Canadian developers of Plexcoin in an SEC litigation in federal district court, the first case brought by the SEC’s Cyber Unit
CFTC
- Appellate counsel in Seventh Circuit appeal concerning the issue of whether certain digital assets are commodities under the Commodity Exchange Act
- Counsel for a software company and its developers in a landmark investigation and settlement with the CFTC
- Counsel for a software company in a CFTC investigation relating to leverage-bearing tokens (obtained letter of non-enforcement)
- Counsel for an individual associated with a DeFi trading platform (obtained letter of non-enforcement)
- Counsel for a Layer-1 blockchain development company in connection with a CFTC investigation
DOJ
- Counsel for former executive of a major collapsed cryptocurrency exchange in a DOJ investigation and subsequent trial
- Counsel for former executive of a cryptocurrency exchange in a DOJ investigation into AML issues
- Counsel for individual cryptocurrency trader in an asset seizure and market manipulation investigation by the DOJ
- Counsel for several individuals related to a DeFi platform manipulation attack
- Counsel for multiple cryptocurrency companies in DOJ investigations of other parties’ alleged criminal activity
- Counsel for founders of a DeFi trading platform that was manipulated, in connection with the criminal action filed against the alleged manipulator
New York Attorney General's Office
- Counsel for digital payments company in a New York State Attorney General investigation
- Counsel for a decentralized exchange’s foundation in a New York State Martin Act investigation
- Counsel for a crypto-focused investment fund in New York State Martin Act and SEC investigations
- Counsel for several Web3 and blockchain companies in New York State Martin Act investigations
Other state regulators
- Counsel for DeFi software developers in investigations by Alabama, Arkansas, California, Kentucky, Massachusetts, Mississippi, New Jersey, Oklahoma, Texas, Washington State and Washington D.C.
- Counsel for a cryptocurrency lender in a Texas investigation into money transmission issues
- Counsel for a crypto shopping app in a Washington State investigation into money transmission issues

Class action litigation

Counsel for Compound Labs and Dragonfly Digital Management in a putative class action in the Eastern District of New York alleging that the PoolTogether protocol constituted an unlicensed lottery in violation of New York law (case dismissed)
Counsel for Uniswap Foundation in a putative class action in the Southern District of New York alleging securities law violations in connection with alleged tokens traded on the Uniswap Protocol (case dismissed, dismissal upheld on appeal)
Counsel for bZeroX and its founders in a class action alleging negligence after a hack
Counsel for Robert Leshner, Geoffrey Hayes, and Gauntlet Networks, Inc. in a putative class action in the Northern District of California alleging unregistered sales of the COMP token as a security
Counsel for Dragonfly Digital Management and Robot Ventures in a putative class action in the Northern District of California alleging unregistered sales of the LDO token as a security
Counsel for Eden Gallery and other individuals in a putative class action in the Southern District of New York alleging breach of contract and breach of consumer protection statute in connection with NFT collection
Counsel for Wintermute Trading in a class action pertaining to Celsius Networks
Counsel for Sino Global Management and other entities in a putative class action in the Southern District of Florida pertaining to the FTX collapse
Counsel for Galaxy Digital Capital Management, L.P. in a putative class action in the Northern District of California pertaining to a Galaxy portfolio company’s online video game business

Commercial litigation

Counsel for Phantom Technologies, Inc. in litigation in the Southern District of Florida against an individual who claimed that SOL tokens were stolen by a third party from his self-custodial wallet
Counsel for the ICON Foundation in litigation in the Northern District of California with an individual who exploited a bug to extract value from the protocol
Counsel for Exodus Movement, Inc. in Electronic Fund Transfer Act litigation in the Eastern District of New York against an individual that certain tokens were stolen by a third party from his self-custodial wallet
Counsel for GGC International Limited in litigation in the Southern District of New York against counterparty for counterparty’s failure to settle digital asset derivative trades
Counsel for Galaxy Digital in a JAMS arbitration with a counterparty over a failure to settle trades and the subsequent confirmation proceedings
Counsel for Max Schneider in litigation in the District of Puerto Rico regarding token buyback dispute
Counsel for Compound Labs in a federal district court case alleging patent infringement
Counsel for Delv in a federal district court case alleging trademark infringement
Counsel for a digital asset mining consultant in litigation concerning cryptocurrency mining venture and the ownership of disputed mining rigs
Counsel for a foreign cryptocurrency exchange in a federal district court action relating to a customer claim
Counsel for a Swiss blockchain company in litigation related to its token issuance
Counsel for a cryptocurrency investment fund in an employment dispute
Counsel for multiple founders of digital asset projects in disputes with co-founders over ownership interests
Counsel for a Web3 bridge company and founders in litigation related to hack

Bankruptcy-related litigation and advisory work

Counsel for Patrick Gruhn, Robin Matzke and Lorem Ipsum UG in adversary proceeding in the United States Bankruptcy Court for the District of Delaware brought by the FTX estate in connection with sale of company to FTX
Counsel for BDK Consulting and other individual defendants in adversary proceeding in the United States Bankruptcy Court for the District of Delaware brought by the FTX estate related to preference and various other claims against the defendants
Counsel for a major cryptocurrency venture investor respecting sale of FTX claims and other claims matters in the FTX bankruptcy matter
Counsel for Ephemeral Variant LLC Capital Management LLC and affiliates respecting claims matters in the FTX bankruptcy proceeding
Counsel for Mohammad Nawaaz Meerun in adversary proceeding in the United States Bankruptcy Court for the District of Delaware brought by the FTX estate in connection with margin trading on FTX exchange
Counsel for Compound Labs, Inc., Robert Leshner and Geoffrey Hayes in adversary proceeding in the United States Bankruptcy Court for the Southern District of New York brought by the Celsius estate related to a protocol price oracle
Counsel for Into the Block in adversary proceeding in the United States Bankruptcy Court for the Southern District of New York brought by Celsius estate regarding disassembly of Celsius’s position within liquidity pool
Counsel for Blockchain Access UK, Ltd. in adversary proceeding in the United States Bankruptcy Court for the Southern District of New York brought by the Celsius estate related to withdrawals and loan agreement
Counsel to various individuals in negotiations and settlements of adversary proceedings in the United States Bankruptcy Court for the Southern District of New York brought by the Celsius estate related to retail withdrawals
Counsel to Wintermute Trading in the negotiation of the retrieval of lost tokens with the Celsius Plan Administrator
Counsel to individual in the Blockfi Inc. chapter 11 proceeding in the United States Bankruptcy Court for the District of New Jersey relating to lost tokens
Counsel to Wintermute in the Prime Core Technologies Inc. chapter 11 proceeding in the United States Bankruptcy Court for the District of Delaware relating to return of improperly held tokens

Amicus brief advocacy

Counsel for Crypto Council for Innovation in the U.S. Supreme Court concerning the application to the digital assets industry of the extraterritoriality doctrine set forth in the Supreme Court’s landmark Morrison v. Nat’l Australia Bank Ltd., in support of a petition for a writ of certiorari
Counsel for Lejilex in the Third Circuit supporting Coinbase’s petition for SEC rulemaking
Counsel for Crypto Council for Innovation and Blockchain Association in the Western District of Texas arguing that airdrops are not securities, in support of Beba LLC and DeFi Education Fund in their lawsuit against the SEC and Gary Gensler
Counsel for Paradigm Operations LP in the Northern District of Texas arguing that the SEC’s new “Dealer Rule” would improperly extend to the digital assets industry, in support of the Crypto Freedom Alliance of Texas and Blockchain Association’s lawsuit against the SEC and Gary Gensler
Counsel for Blockchain Association and DeFi Education Fund in the Western District of Texas regarding the SEC’s Consolidated Audit Trail, in support of Erik Davidson, John Restivo and National Center for Public Policy Research’s lawsuit against the SEC, Gary Gensler and Consolidated Audit Trial, LLC
Counsel for Blockchain Association in the Southern District of New York, in the SEC’s enforcement action against Ripple
Counsel for Blockchain Association in the Western District of Washington, in the SEC’s insider trading enforcement action against Ishan Wahi, Nikhil Wahi and Sameer Ramani
Counsel for Paradigm Operations LP in the Supreme Court for the State of New York, in the NYAG’s enforcement action against KuCoin, arguing that ETH should not be treated as a security

Regulatory advisory work

Counsel for myriad DeFi protocols, exchanges, projects, DAOs, institutional traders, non-custodial wallet application companies, token issuers and institutional crypto liquidity providers, on SEC, CFTC, FinCEN and state regulations
Counsel for Ember Fund on regulatory aspects of a major deal partnership
Counsel for the Washington Nationals baseball team on regulatory aspects of a sponsorship deal involving a cryptocurrency platform
Counsel for several major DeFi protocol “grants programs” on structuring and regulatory issues
Counsel for several major foundation companies supporting DeFi communities on structuring and regulatory issues
Counsel for a leading social media company on the treatment of ERC-20 tokens within their platform
Counsel for various investors on regulatory diligence on cryptocurrency and blockchain aspects of significant investments
Counsel for several foreign cryptocurrency exchanges on United States regulatory matters
Counsel for a gaming company on the regulatory risks associated with its distribution of native gaming token
Counsel for investment firms on SEC regulations related to commercial lending and borrowing activity

Corporate and EC/VC work

Act as outside general counsel for Web3/cryptocurrency companies in all verticals
Counsel for various fund managers on the regulatory aspects of several cryptocurrency fund formations
Represent venture-backed companies and development shops in incorporations and foreign foundation formations
Represent companies and investors in spin-out transactions and M&A transactions
Represent companies and investors in Safe and Token Warrant financings, and Series Seed – Series C Preferred Stock financings
Represent companies, investors and foreign foundations in token launches
Represent development shops and foundations in grants and commercial/technology transactions
Advise companies, investors and foundations regarding token compensation terms and structures
Advise Board of Directors and Founders regarding litigation and corporate governance transactions related to the blockchain industry

Note that some of the above corporate work was performed by attorneys prior to joining Morrison Cohen.

Tech, Data & IP work

Drafted Terms of Service and privacy policies for dozens of Web3 companies and service providers
Drafted IP agreements for a DeFi protocol
Drafted artist agreements for several NFT platforms and artists
Drafted license grant agreements related to various open-source software with restricted licenses
Drafted node operator agreement
IP and related support for several M&A transactions

Related Files & Links