Confusing Coin Offering Regulations


Emerging software companies are confused by federal efforts to regulate blockchain technology. They want to follow the rules in order to finance new software businesses.  The trouble is they are not clear.

Here is the context.

Small companies are offering digital currency referred to as coins.  These coin offerings circumvent the traditional methods of financing.  These newer coins are paid for with Bitcoin or other established cryptocurrency.

Understandably, many of these companies are running into legal problems.


For those not in the legal profession, it helps to know that the law is backward looking.

This deference creates stability in the development of the law, which is very slow moving.  The trouble is the government is going to look back at case law that doesn’t exactly fit the current environment.

It is very rare that a client’s facts (the real world) and the facts of cases and regulations out in the legal world  will fit together exactly.  This is amplified in the blockchain technology sector.


While the legal reasoning isn’t always clear, what has emerged is a pattern of enforcement.  The SEC — like the IRS and ICE in the Department of Homeland Security —  will follow up on an anonymous tip.

Anyone attending a networking event from the public could be a potential source. Anybody working in the company can make an anonymous tip.

Recently, a high level Security and Exchange Commission Official clarified which factors  the SEC may looks at in order to regulate a blockchain software company offering coins. (Source: )If a company is unregistered and doing these things, it  is very likely that there will be an enforcement investigation should there be a tip.


1. Is token creation commensurate with meeting the needs of users or, rather, with feeding speculation?

Answer: If your company is offering over a million tokens (selling them on exchanges that people in the US and all over the world have access to) and you have only two formal users of your software product, the token is not commensurate with the needs of users. In this case, the token would be a security.

2. Are independent actors setting the price or is the promoter supporting the secondary market for the asset or otherwise influencing trading?

Answer: If there is a person or coordinated group that is working actively to develop or guide the development of the infrastructure of the network – this person or group could be founders, sponsors, developers or “promoters” in the traditional sense – then it is a securty.

3. Is it clear that the primary motivation for purchasing the digital asset is for personal use or consumption, as compared to investment?

Answer: For example, when someone buys a housing unit to live in, they are using it. When somebody buys a “token” and is not able to use it in a software application immediately (can only hold and sell it later for investment) it is a security.

Have purchasers made representations as to their consumptive, as opposed to their investment, intent? Are the tokens available in increments that correlate with a consumptive versus investment intent?

Answer: See answer to #1 above, regarding a million tokens and two users.

4. Are the tokens distributed in ways to meet users’ needs? For example, can the tokens be held or transferred only in amounts that correspond to a purchaser’s expected use? Are there built-in incentives that compel using the tokens promptly on the network, such as having the tokens degrade in value over time, or can the tokens be held for extended periods for investment?

Answer: If you don’t know the answers to these questions, you probably have a security.

SEC Chairman Jay Clayton has stated… entities that allow for payment in cryptocurrencies, allow customers to purchase cryptocurrencies on margin or otherwise use cryptocurrencies to facilitate securities transactions should exercise caution, including ensuring that their cryptocurrency activities are not undermining their anti-money laundering and know-your-customer obligations.

5. Is the asset marketed and distributed to potential users or the general public?

Answer: Can you say who has your token now? If the answer is no, then you are marketing to the general public. I would also use the example of the networking event I attended in Manhattan. If coins were marketed to a seamstress or beauty salon owner investing and trading in her free time, you may have a difficult time arguing this investor is utilizing the token in the blockchain.

6. Are the assets dispersed across a diverse user base or concentrated in the hands of a few that can exert influence over the application?

Answer: It is easy to apply the Supreme Court’s “investment contract” test to an investment of money in a common enterprise with an expectation of profit derived from the efforts of others. Where the purchasers are passive, relying on the efforts of others for a return, this is an investment contract. In an important case, the Supreme Court stressed: “… the emphasis [is] placed upon economic reality.” Calling something a “utility token” will not take it out of the enforcement environment.

7. Is the application fully functioning or in early stages of development?

If you have a fully functioning application – with, for example, long term technology licensing and royalty streams and utility tokens that only function within the software environment with an incentive to use and not sell or transfer – you are probably on the right track!


I hope this article will answer some of the questions that apply to financing a start up and reveal possible SEC investigation triggers .

A New F Visa Rule Begins August 2018


By Dena Wurman, MPA, JD

May 25, 2018

The US Immigration service is tightening the rule on F, J and M non-immigrant students who remain in the US after completing their studies, without any legal immigration status.  This new rule will become effective on August 9, 2018. The change will automatically take effect for  out of status students.

The purpose of this new rule is to tighten up a loophole allowing a minority of students to stay in the US who had no pending immigration matters that could trigger a denial.


“Status” and “unlawful presence” in immigration law are very different concepts.

The distinction between status and presence has important consequences that may determine whether an immigrant has the opportunity to become a permanent resident or US citizen.

An immigrant is out of status when no formal decision has been made by the government but they remain in the US after the expiration of their visa.

A student who overstays a visa is considered to be out of status.   The immigration service calculated in 2016 that between four and 12% of all F, J and M students were overstays in the US, of a total of 1.4 million admitted.   This is roughly 175,906 students of the 2016 group measured who were expected to change status or depart.

Before the new change takes effect in August of this year, students (and their dependents) were allowed to stay in the US for “duration of status” or until their I-94 document expired.  These students were not considered unlawfully present until there was a formal adjudication – by the immigration service or an immigration judge – which then required them to leave the country.


Unlawful presence is a term of art with very harsh consequence that arise from an action (or inaction) a student may or may not know is illegal.  Over staying after a student visa ends now has minimal effect.

Until the new rule takes effect, unlawful presence starts on the date an officer, judge or an administrative court determines there has been a violation of an immigration law.

After this decision is made, unlawful presence begins and the clock starts ticking.  If the time reaches a certain point, and the immigrant eventually departs, there may be a very long wait before the US government permits re-entry to the US.

For example, individuals who have accrued more than 180 days of unlawful presence in the US, and then depart, may be subject to 3-year or 10-year bars to (re)admission.  Individuals who depart and re-enter after accruing more than one year of unlawful presence  are permanently inadmissible.


When this new rule takes effect August 9, 2018.  F, J, and M nonimmigrants who failed to maintain nonimmigrant status before August 9, 2018, will start accruing unlawful presence based on that failure on August 9, 2018, unless the nonimmigrant had already started accruing unlawful presence based on several other scenarios.


An issue not included in the guidance but one that may impact students is their ability to adjust status later in the US.

For example, a student who was an overstay could, prior to August 2018, get a green card as the spouse of a US citizen merely by entering legally (as a student) and overstaying without any adverse legal event occurring. This overstay would be forgiven if the application were to be sponsored by a UC citizen spouse.

Now, an overstay will automatically convert to unlawful presence on August 9, 2018.

The new rule may prevent any number of overstay students now in the US who may wish to later marry a US citizen from getting a green card and becoming US citizens.


Tricky twists and turns in immigration law

To overcome the tricky twist and turns in immigration law,  here are some points to consider:
1) Is the visa you are applying for the right one under the circumstances?

In one case a well-meaning mother applied for a B visa for her foreign born daughter.  The daughter wanted to visit her American  boyfriend.  When the daughter’s  visitor B visa expired after six months, the couple made an Infopass appointment.  They were told by the USCIS agent at the window to simply cross the Mexican border and upon return, have the girlfrend’s foreign passport stamped.   The couple did.  She then spent most of the entire year in the US on a visitor visa.

It wasn’t until she attempted to re-enter the US that the complete time period she spent here was evident to the Customs and Border Patrol agent looking at her passport.  She was detained at the airport, her visa cancelled and returned to her country of origin.

The lesson here is do your research on the duration and purpose of a visa and don’t believe everything you hear from non-lawyer, government agents.

2)  Now that I found the form, where the heck do I file it?

Immigration Service Centers throughout the U.S. accept different forms.  These locations change frequently. All the new mailing addresses are updated on the USCIS website if you drill down on the links associated with each form.   When a form is “expedited” it’s mailed to a different address, for premium processing.

3)  More Helpful Tips

TIP 1:  Fees are usually required with a form. When the filing fees change, if the new fee is not mailed with the form, everything will be returned to the applicant.

TIP 2:  Immigration law changes every day. When submitting a form with a letter or a legal brief, understanding the twists and turns in the law and hitting all the required, legal elements is important.

TIP 3: A petition needs a “wow” factor. There is a short time to make a big impact. A government reviewer will set aside a confusing, large petition for a smaller well-crafted one.  If there isn’t a persuasive reason why the evidence is included and how it proves the case, it should be left out.

It is best to work with an experienced attorney.

Attorney Dena Wurman has helped clients navigate the complicated federal U.S. immigration system. Through her efforts, new immigrants are awarded visas, green cards and U.S. citizenship. Still have questions?   This office offers a number of solutions to meet your needs and budget.   Call (646) 580-0617 for a free assessment of your case or use the contact form on this website.

Cryptocurrency, Tax and Non-Immigrant Employment

The sale or exchange of convertible virtual currency, or the use of convertible virtual currency to pay for goods or services in a real-world economy transaction, has tax consequences that may result in a tax liability.

The development of new forms of income (cryptocurrency) raises questions about how a non-immigrant employee should report and categorize this.


Is trading crypto currency considered “employment income” if I trade on my H visa in the US?


It depends. For people who use Bitcoin mainly as an investment, capital gains, as you may know, are taxed at lower rates than ordinary income. Think about Bitcoin in terms of common stock. If you sell stock within a year of buying it, the profit is taxed as ordinary income. But if you hold that stock for longer, it is taxed at the capital gains rate.

In IRS Notice 2014-21, the character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.

According to the IRS, when a taxpayer successfully “mines” Bitcoins and has earnings from that activity whether in the form of Bitcoins or any other form, he or she must include it in his gross income after determining the fair market dollar value of the virtual currency as of the day he received it.

If a bitcoin miner is self-employed, his or her gross earnings minus allowable tax deductions are also subject to the self-employment tax.



Despite the lack of consumer protection regulation, the IRS taxes Bitcoin.  Virtual currency can be treated as income for the purpose of tax reporting and as property for capital gains tax.

When examining the IRS approach to the taxation of virtual currencies, the most basic question is whether they will be treated as currency or property.


In IRS Notice 2014-2, wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes.


In IRS Notice 2014-21, payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply. Normally, payers must issue Form 1099.


Virtual currency issued to fund software development projects is relatively new.  Not relying on the usual venture funding or traditional bank lending, software project managers seek financing directly from investors.   This is called crowdfunding.

The virtual currency is offered to the public in a coin offering.  It can be sold on an exchange or held in a wallet.  In pre-offer sales it must be held for a specified period of time.

The reason this new business financing paradigm developed was to free newer software projects from the usual financing framework (banks) and level the playing field.  Further, many investors view mining and exchanging this virtual currency as the new frontier for making money.

Bitcoin is one of over 2,500 different of virtual currencies. Virtual currency value often fluctuates by the hour. In some environments, virtual currency operates like “real” currency but it does not have legal tender status in any jurisdiction.


In order to purchase virtual currencies, you must buy directly from someone who owns them or through an exchange platform. These platforms tend to be unregulated.

Cybersecurity crime in the US continues to rise. The FBI reports 22,000 complaints per month in 2014, totaling $800 million in consumer losses per year (Source:

While securities accounts at U.S. brokerage firms are often insured by the Securities Investor Protection Corporation (SIPC) and bank accounts at U.S. banks are often insured by the Federal Deposit Insurance Corporation (FDIC), bitcoins held in a digital wallet or Bitcoin exchange currently do not have similar protections.

Dena Wurman is a New York licensed attorney who has practiced federal law since 2005. She blogs on topics that explain new federal regulations and how they relate to business. She was told at a recent blockchain meet-up event in Manhattan that there is a big need for good legal counsel in the blockchain space. She decided it’s worth exploring. This is a first in a series of articles.

Newer I-9

On July 17, 2017 the United States Citizenship and Immigration Services (USCIS) released an updated I-9 form.  On September 18, 2017, all employers will be required to use the revised form, so it makes sense to avoid any delay and begin use of the new version immediately.

What is an I-9 form and why do employers need to use it?  The Immigration Reform and Control Act of 1986 (IRCA) requires U.S. employers to verify the identity and eligibility to work on Form I-9.

All individuals, both U.S. citizens and aliens, hired on or after November 7, 1986 are required to complete the form when hired.

How do you complete the I-9?

As an employer, your duty is to verify that the employment documents employees present appear legitimate.  In order to avoid a claim of discrimination on the basis of citizenship status or national origin, an employer is not allowed to ask an employee for a specific document.  The employee’s duty is to fill out the form honestly.   The Immigration Act prohibits a person from forging or falsifying  any document for the purpose of obtaining a benefit.

When an employee presents documents from the acceptable list on the I-9 form, these are evidence of the employee’s right to work in the U.S.  Absent clear evidence of the contrary such as the  immigration enforcement informs you that the A# is wrong the employee says “I am not authorized to work,” the employer need not inquire further.

Once the I-9 is complete, rechecking documents is prohibited by IRCA.

Civil and criminal sanctions will be imposed on U.S. employers and individuals who, subsequent to November 6, 1986, hire or refer for a fee aliens who are not authorized to work in the United States.

Employers will need to adapt to these new changes no later than September 18, 2017 or face the possibility of large fines.

Call for a consult to determine what documents you need have on file to protect yourself.  Call (646) 580-0617 or complete the contact form on this website.

Dena Wurman is an expert in I-9 forms in the following industries:  Retail, Restaurant, Landscaping, Housekeeping, Maintenance, Construction.  Beware! If caught, a repeat-offender employer of illegal immigrants can face civil and criminal fines (up to $11,000 per employee) and jail time (up to five years).

Immigrants traveling

Immigrants traveling to the US have had a hard time during the past year.  Even US  permanent residents with green cards are experiencing difficulty returning to the US.  Especially those with criminal records seeking to be readmitted.  Non-citizens considering travel abroad should exercise caution.

Think before making any long trip, before seeking new immigration benefits, or applying for citizenship. You may be denied admission if these “inadmissibility” grounds apply if you:

(1) have abandoned or relinquished your permanent resident status,
(2) have been absent from the United States for a continuous period in excess of 180 days,
(3) have engaged in illegal activity after departure from the U.S.,
(4) have departed from the U.S. while in removal or extradition proceedings,
(5) have committed a criminal or related offense (including “crimes of moral turpitude”, drug trafficking, or prostitution),
(6) are attempting to enter at a place other than a designated port of entry or have not been admitted to the U.S. after inspection and authorization by an immigration officer.

What to some may seem relatively minor crimes, for example theft or domestic violence, may in fact be grounds for inadmissibility.  Inadmissability is a term used in immigration that means you will not be allowed to return to the US even if your family is there and you already have a green card.

If after having received your green card, you commit a crime (or more than one crime) these infractions would not come to the attention of immigration authorities until you travel abroad.  At that time you may be denied entry.

Since 9/11 the immigration service has developed elaborate systems to track travel in and out of the US.  All passports are now machine readable.  Fingerprinting technology has evolved over the past 15 years.  Paper-based systems have been phased out.  Most records are now electronic and it is easier than ever to match fingerprint records with immigration benefits and travel.

Given these new events, it is still possible to overcome an issue at the border with the right information.

Many of the grounds of inadmissibility can be waived in individual cases. For example, INA § 212(d)(3) allows the Secretary for Homeland Security to waive any of the grounds, except for a few security-related provisions, for nonimmigrants applying for a visa or seeking admission.

Waivers for permanent residents are more limited.

Are you a nonimmigrant or green card holder planning a trip?  Clear any concerns you have in advance with an immigration attorney.

H-4 Visa Holders May Lose Work Permit

There are indications that the Trump administration is preparing to issue regulations rescinding the ability of H-4 spouses to get work permits.  H-4 visas are given to the spouses of H-1B visa holders, highly-skilled foreign workers, the majority of whom are from India.

Until 2015, H-4 visa holders – who often had skill levels comparable to their spouses – were not allowed to work. In 2015, U.S. Citizenship and Immigration Services announced that some H-4 visa holders would be able to work if their spouses were on track for permanent residency in the U.S.

The primary visa holder had to be a beneficiary of an approved Form I-140, Immigrant Petition for Alien Worker, or a nonimmigrant seeking lawful permanent residence to work and remain in the United States beyond the six-year limit on their H-1B status.

If the application was approved, the eligible spouse would receive a Form I-766, Employment Authorization Document (EAD), allowing them to work during the period of its validity.  The EAD validity period generally will match the H-4 spouse’s authorized period of admission, up to three years.

The 90-day period for adjudicating these I-765 applications, however, does not begin until the companion extension application is approved.

Travel Ban Highlights

Since January 2017, three executive orders referring to immigrants have been issued by the president.  All are controversial.  In addition to funding a wall between the US and Mexico and re-prioritizing deportations, there is a proposed travel ban.

Of the three orders, the travel ban was re-written and issued again.

What is the travel ban?  The purpose of the ban is to freeze travel from primarily Muslim countries.  In early February a Washington court stopped (enjoined) the ban.

The president then drafted a new order rather than appeal this old one.

After releasing this new presidential order, a federal court in Hawaii came out with a nationwide injunction striking down all of the travel ban.

As of March 16, 2017, there is  no suspension to travel to the U.S.

Deportation Facts

The Executive Office for Immigration Review (EOIR) operates immigration courts all over the U.S.  EOIR is responsible for all hearings to deport immigrants illegally present in the U.S.

If you are a non-citizen, or an attorney with a non-citizen client, this article will cover a few key terms so that you may respond appropriately. The notice always used is most commonly referred to as an “NTA.”

A Notice to Appear (NTA) advises the immigrant or attorney to appear before an immigration judge.

Service by mail is sufficient if there is proof the government attempted to deliver the NTA to the last address provided. After receiving the NTA it is important to meet with an attorney and discuss the factual allegations presented in it. It is possible that the government may have alleged facts that are not accurate in the notice.  One strategy an attorney may use is to challenge or concede to charges in this document.

Most scheduled hearings are what the court calls “master calendar hearings.”

A master calendar hearing is an individual’s first appearance before an Immigration Judge. The purpose of the master calendar hearing is to advise individuals of their rights, explain the removal charges filed, take pleadings, identify and attempt to narrow the factual and legal issues, and set deadlines for filing any papers needed for subsequent hearings.

So that you may have the opportunity to secure counsel, the law requires 10 days to elapse between service of the NTA and the first removal hearing.

Once the 10 days have elapsed, the government is free to pursue a removal hearing regardless of whether you have legal representation.

It is worth noting that the Department of Homeland Security (DHS) does not have permission to search your home without your consent. The NTA is not a warrant.

The government needs a warrant signed by a court (not an administrative agency such as the DHS) to search your property.  You do not have to say anything to an immigration enforcement officer. Immigration is a civil matter.

Courts have said that immigration law is second only to tax law in its complexity.

Attorney Dena Wurman has represented clients in immigration hearings and removal proceedings for over a decade. If you received an NTA to appear, she is qualified and experienced to represent you, your client or your family member. For a confidential consultation call (646) 580-0617 or email

Dual Intent Visa


When applying for a visa to visit or work in the US, the immigration authorities are going to look very closely at your reasons for visiting or working.  More importantly, they will want to know whether members of your family already reside in the US.  The service looks at these areas because they reveal what your real reason is for visiting.

Different visas have restrictions on what you can do while using them.  For example, a B visa is intended for tourist-type activity and strictly prohibits working for payment in the U.S.

Non-immigrant visas, such as a B visa, are for individuals with permanent residence outside the U.S.  who wish to be in the U.S. on a temporary basis – for tourism, medical treatment, business, temporary work or study.

On the other hand, an H visa is a “dual intent” visa.   Dual intent means you plan to visit and work and at the same time may stay for the longer term and apply for a green card.

Applying for an H1B and a green card at the same time is possible in this instance.

However, applying for a B visa and a green card at the same time is not.

When applying for either a visa or green card (which includes the authorization to work in a virtually unrestricted way) you must match your current visa intent with your future plans.

Your “intent” is a major factor the government looks at when approving your application to stay and work in the U.S.  If your intent doesn’t match, our application will be denied.