Lowenstein Crypto advises leading digital asset and cryptocurrency projects, exchanges, and trading firms. Our practice covers regulatory advice, transactions and structuring advice, investigations, and adversarial matters including commercial disputes, bankruptcy, and related litigation. As these markets continue their rapid growth and market participants continue to evolve and mature their businesses, we are providing this weekly digest as a resource that highlights and summarizes a selection of key recent legal regulatory developments.
Delaware Court of Chancery Holds Crypto Is “Located” Where Its Owner Is
On Oct. 6, Delaware’s Court of Chancery dismissed an action seeking to freeze and recover over 1,000 ether (ETH) from two ex-employees of Duelbits, a Curacao-based online crypto casino, holding that ETH is intangible property whose nonexclusive situs follows the owner’s domicile. However, while the defendants may have expected to be sued in Curacao, because Duelbits assigned its rights to a Delaware limited liability company, it would offend “traditional notions of fair play and substantial justice” to require nonresident defendants to be hailed to court in Delaware. The court further reasoned that although situs may sometimes satisfy minimum contacts where the asset is inextricably tied to Delaware, as applied here, because ETH is not a Delaware-created asset, its constructive presence in Delaware does not, by itself, permit the court to impose obligations on non-residents. See the Chancery Court’s opinion here.
Dubai’s VARA Fines 19 Crypto Firms for Operating Without Licenses
On Oct. 6, Dubai’s Virtual Assets Regulatory Authority (VARA) issued fines to 19 companies for conducting unlicensed virtual asset activities. VARA is the primary regulator for virtual asset activities and requires market participants who engage in regulated activities to be duly authorized and licensed with VARA to engage in such activities, which include, but are not limited to advisory services, lending and borrowing, custody services, exchange services, and certain virtual asset issuances. VARA emphasized that the enforcement actions followed multiple warnings and public notices issued earlier in the year urging companies to regularize their status. VARA further noted that while some firms have since taken corrective steps, others remain noncompliant and may face additional sanctions if violations persist. Fines ranged from AED 100,000 (~$27,200) to AED 600,000 (~$163,000). The regulatory notice can be read here.
Galaxy Digital Launches GalaxyOne, a New Multi-Asset Investment Platform
On Oct. 6, Galaxy Digital announced the launch of its new multi-asset investment platform supporting various financial products and services with respect to digital assets, U.S.-listed equities, exchange-traded funds, high-yield cash deposit accounts, and more. GalaxyOne seeks to leverage its institutional-quality infrastructure to serve individual investors who seek to access traditional and digital asset markets. For an overview of the products and services available on the GalaxyOne platform, visit the website here. For additional details on the product launch, see GalaxyOne’s press release here.
Plume Network Registers as SEC Transfer Agent
On Oct. 6, Plume Network (Plume) became the first layer-2 blockchain protocol to register with the U.S. Securities and Exchange Commission (SEC) as a transfer agent. This designation enables Plume to manage official records of securities ownership and oversee the issuance and transfer of tokenized real-world assets (RWAs) in compliance with federal regulations. Transfer agents traditionally handle critical back-office functions for securities issuers, including maintaining shareholder registers, recording ownership transfers, and managing corporate actions. Plume stated that its registration allows it to replicate and automate those functions on-chain. Plume’s platform is designed to support asset managers and institutions seeking to bring RWAs on-chain, offering tools for compliance, reporting, and settlement. By aligning with SEC requirements, Plume aims to streamline asset tokenization while enhancing transparency and investor protection. See Plume’s press release here.
S&P To Launch Crypto Index
On Oct. 7, S&P Global Inc. announced the launch of the Digital Markets 50 Index, a pioneering benchmark that combines 15 leading digital assets with 35 publicly traded blockchain-related equities. Developed in partnership with tokenization firm Dinari Inc. (Dinari), the index reflects the growing integration of digital assets into traditional financial markets. The index includes cryptocurrencies with market capitalizations above $300 million and equities valued at over $100 million, with a 5 percent cap on individual asset weighting. While indexes are not directly investable, they are key benchmarks for exchange-traded funds and other investment products. Dinari plans to issue a tokenized version of the index, called dShare, by the end of 2025, enabling direct investor exposure. See the related press release here.
