US judge says ICOs are covered by securities law

A Federal Judge ruled that initial offerings fall under US securities laws, in a move that reinforces efforts by prosecutors to crack down on allegations of fraud in the cryptographic area. change.

The decision was made in the case Maksim Zaslavskiy, accused last year by the US prosecutor's office for the district of New York, in the east of the country. Mr. Zaslavskiy is charged with fraud involving two ICOs in which investors were informed that the tokens issued were backed by real estate and diamonds, which, according to the prosecutors, never existed.

Mr. Zaslavskiy dismissed the charges and tried to dismiss the case on the grounds that the tokens were not securities and that the existing securities laws were "unconstitutionally vague" as applied in this case. .

On Tuesday, Judge Raymond Dearie rejected the motion to dismiss and said that the ICO chips could be considered as securities.

"The question is whether the" elements of a for-profit enterprise "are sufficiently alleged in the indictment, so that, if the trial is proven, a reasonable jury could conclude that" the investors provide[d] capital and share[d] in profits and profits; [and] the promoters manage[d]control[ed] and operate[d] the company. For current needs, we conclude that they are, "he writes.

However, Judge Dearie stated that a final decision would be made by the jury and that Mr. Zaslavskiy's lawyers could argue that the chips were rather currencies and are therefore not covered by securities laws.