New California Law on Blockchain Technology
New California Law on Blockchain Technology
California recently passed Senate Bill No. 838 (the “Bill”), which will allow private and social purpose corporations incorporated in-state to use blockchain technology to issue stock and keep corporate records via blockchain technology. Blockchain is the technology behind cryptocurrencies like Bitcoin and Ethereum that have garnered recent excitement from investors and consternation from regulators. The bill defines “blockchain technology” as a “mathematically secured, chronological, and decentralized consensus ledger or database.”
One noteworthy limitation is that the Bill only applies to corporations that do not already have outstanding securities listed on specified exchanges, like the New York Stock Exchange or the NASDAQ Global Market (among others). This will prevent most large corporations from utilizing the Bill and therefore the Bill will serve as a test run for blockchain technology in the corporate sphere. In the interim, Faruqi and Faruqi attorneys will continue to monitor this space to ensure that investors remain protected.
Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in Atlanta, Los Angeles and Philadelphia.
Since its founding in 1995, Faruqi & Faruqi, LLP has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, direct purchasers, consumers and employees.
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