As the number of litigations involving digital assets continues to rise, courts have increasingly grappled with how the U.S. securities laws apply to novel fact patterns that, in many instances, involve conduct occurring outside the U.S. Step one in this analysis is to
determine whether they apply at all.
The Supreme Court’s landmark decision in Morrison v. National Australia Bank Ltd. sets forth the test for determining which transactions are sufficiently “domestic” to fall within the scope of the U.S. securities laws. 561 U.S. 247 (2010).
The Morrison Court held that they apply in two circumstances: (1) for “transactions in securities listed on domestic exchanges”; and (2) for “domestic transactions in other securities” Id. at 267. Transactions are considered “domestic transactions” where “irrevocable liability” is incurred within the U.S. See Absolute Activist Value Master Fund Ltd. v. Ficeto, 677 F.3d 60, 67 (2d Cir. 2012).
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