Internet & Social Media Law Blog

The New York Times reports that New York State’s top financial regulator has granted the first license to a Bitcoin exchange, allowing it to open legally to customers across the country.

To find out more information, please read Bitcoin Exchange Receives First License in New York State.

On March 10, 2015, the New Jersey Division of Taxation issued Technical Advisory Memorandum TAM-2015-1, explaining its policy regarding convertible virtual currency.

1. The IRS has held that convertible virtual currency (CVC), such as Bitcoin, is treated as property for U.S. federal income tax purposes. Consequently, transactions involving CVC are treated as barter transactions. In general, each party in a barter transaction is viewed as both a buyer (of the goods or services acquired) and a seller (of the goods or services given in exchange). New Jersey conforms to the federal treatment of CVC for corporate and personal income tax purposes, including wage withholding and reporting of payments to independent contractors.
2. In New Jersey, sales tax is imposed on the buyer, but the seller is obligated to collect and remit the tax. Sellers of taxable goods or services that accept CVC in exchange for those taxable goods or services must register with the New Jersey Division of Taxation for sales tax purposes.
3. Where a customer exchanges CVC for taxable goods or services, the customer owes sales tax as if it paid in U.S. dollars. In this case, the sales tax owed is determined by the market value of the CVC exchanged, converted into U.S. dollars at the time of the exchange, and the seller of the goods or services that are taxable is required to collect and remit the sales tax on the transaction. On the other side of the barter transaction, the seller of the CVC (the customer) is not required to collect and remit sales tax on the transaction because the CVC is nontaxable intangible property under New Jersey sales and use tax law.
4. The sale of CVC itself in exchange for U.S. dollars or in exchange for another CVC does not create a sales tax obligation on the part of either the seller or the buyer.
5. Sellers accepting CVC must record in U.S. dollars at the time of each transaction the value of the CVC accepted, the value of the goods or services sold, and the amount of sales tax collected. The sales tax is based on the value of the CVC converted to U.S. dollars at the time of a taxable transaction. Sellers must record the value of the CVC accepted at the time of each transaction in U.S. dollars and the cash value of the goods or services sold. The amount of sales tax collected by the Seller must be recorded in U.S. dollars at the time of each transaction, and must be remitted in U.S. dollars. Sellers who accept CVC as payment for goods or services must also retain documentation of the amount for which they regularly sell the same or similar property to customers for U.S. dollars.

The information presented is only of a general nature, intended simply as background material, is current only as of its indicated date, omits many details and special rules, and accordingly cannot be regarded as legal or tax advice.

Download: Five Things to Know about New Jersey’s Taxation of Convertible Virtual Currency.

The Game Developer Symposium is open to any of the following: amateur, professional, or aspiring game developers, gamers, musicians, graphic designers, coders, animators, sound technicians, hardware developers, marketers, storytellers, writers, etc.. Some of the above may seem surprising to you, but so will this fact: the gaming industry is bigger than the movie industry! It takes a team to create games with all the different elements involved, and there are many roles to play: from musicians to create background music, to graphic designers for creating compelling characters for play, and the overall look and feel of the game. All skill sets and experience are valid. Even if you are just a gamer and fan, game developers have roles for you as beta testers. The gaming industry pie is so big and lucrative, there is more than enough for all to share.

Come to this event on Tuesday, April 21, 2015 from 5:30 – 8:30 pm at Pillsbury’s Washington, DC Office (1200 Seventeenth Street NW) to learn more about the gaming industry from multiple perspectives. We will have game developers, professors, and lawyers to help describe the opportunities and challenges in the gaming industry, and ways to promote and protect the game or work you create.

You may have never thought of game development as a career, but we are here to change your mind. Come and learn how you can get involved in the industry and profit from it.

For more information, and to RSVP, please click here: Game Developer Symposium.

A weekly wrap up of interesting news about virtual worlds, virtual goods, and other social media.

Will Doctors Soon Prescribe Video Games?
How researchers are using computer games to treat pain, aging, ADHD, and other ailments.

5 ways the Postal Service could save money with Google Glass-type eyewear
Digital eyewear is far from cheap, but the devices might help the financially struggling U.S. Postal Service save millions of dollars each year.

Augmented and Virtual Reality To Hit $150 Billion, Disrupting Mobile By 2020
Virtual reality and augmented reality are exciting. There are amazing early-stage platforms and apps, but VR/AR in 2015 feels a bit like the smartphone market before the iPhone.

Big Investor Involvement Could Boost Bitcoin
Major players could reduce volatility and increase acceptance of virtual currency.

Teens, Social Media & Technology Overview 2015
Facebook is the most popular and frequently used social media platform among teens; half of teens use Instagram, and nearly as many use Snapchat.

This week, Nintendo shocked the gaming industry when it announced a partnership with DeNA, a company that makes free-to-play games for mobile phones. Historically, Nintendo has been resistant to releasing their well-known games on mobile devices, so the partnership represents a possible shift away from games that are exclusive to Nintendo’s gaming consoles.

Nintendo’s classic titles will likely not be pushed to mobile devices. For now, Nintendo and DeNa plan to develop new software from the ground up for mobile devices.

To read more about the partnership between Nintendo and DeNA, including Nintendo CEO Satoru Iwata’s thoughts on mobile gaming, please click here.

Each year, the Virginia Serious Game Institute invites applicants to reside in the business incubator located on the George Mason University – Prince William Campus in Prince William County, Virginia. Each application requires the submission of a business plan summary, or company one-page summary. Applications are considered on how well the business plan or proposal encompasses the development of product software, hardware, or Information Technology services and financial feasibility. An advisory board of distinguished investors and industry experts judge and select the qualifying candidates. This year capacity has increased to allow seven new start-ups to enter the VSGI.

For more information, and to find out more about the submission process, please read the VSGI’s News Release.

The VSGI, the only institute of its kind on the East Coast, and one of only four global affiliated facilities, supports and accelerates early-entry entrepreneurship into the simulation, modeling, and serious game design industry. Its mission is to support translational applied-research, rapid prototype development, high-value knowledge job creation and regional economic development through start-up business incubation and spin-out of high growth companies leading to commercialization.

On February 27, 2015, California Assemblyman Matt Dababneh,
chairman of the state’s Banking and Finance Committee, introduced Assembly Bill 1326, which would prohibit a person from engaging in California in the business of “virtual currency” without a license from the California Department of Business Oversight, unless such person otherwise qualifies for one of a limited number of exemptions. The Department of Business Oversight is the state agency that regulates a variety of financial services,
products, and professionals, including money transmitters.

To read more, please see this article on Digital Currency Council.

Former Goldman Sachs, Morgan Stanley, BNP Paribas and Societe Generale bankers have announced a new futures and options derivatives-trading platform for bitcoin. The derivatives, tied to the price of bitcoin, will enable businesses and investors to hedge their digital currency exposure. Will this be a turning point for bitcoin?

http://www.cnbc.com/id/102456187

A mobile app that collects users’ location data while the mobile app is not in use should clearly disclose such practices and provide users with choices. Failure to do so could give rise to an FTC claim of deceptive practices.

For more information, please read our Client Alert.

The University of Amsterdam’s Institute for Information Law will be holding its third annual Summer Course on Privacy Law and Policy from July 6-10, 2015. The course will focus on privacy law and policy related to the Internet, electronic communications and online and social media. It will feature a faculty of leading experts from the EU and the US who will explore the recent developments in this rapidly changing field and explain how businesses, governments and others can achieve their goals within it.

The course, which will meet in a historic house along one of Amsterdam’s most beautiful canals, will employ a seminar format designed to provide not only practical information about the latest developments, but also big picture, strategic insights into where the field is headed in the future. It is particularly suited to private sector lawyers,
government officials, NGO staff, academics, PhD students and others who work in the areas of privacy and data protection law. The seminar format promotes interaction among participants and faculty, and incorporates a range of practical exercises to apply the knowledge. Enrollment is limited to 25 participants.

Those who wish to secure a place are encouraged to apply soon.  Additional information–including a list of faculty, a detailed course program and a link for online registration–is available at http://www.ivir.nl/courses/plp/plp.html.

Link to the course flyer: http://www.ivir.nl/syscontent/pdfs/76.pdf

For questions, please contact course organizer Dr. Kristina Irion:
informationlaw@uva.nl

Course location: De Rode Hoed, Keizersgracht 102, Amsterdam