ICOs Come Within The Purview Of US Securities Laws — US Court
A US federal judge has delivered a judgement that ICOs are covered by the US securities laws, Bloomberg reports. The court's ruling allows the US government to regulate billions of dollars in circulation in the crypto sphere on a par with securities.
The court handled a criminal case against a man charged with promotion of cryptocurrencies backed by real estate investments and precious stones which, in accordance with the prosecutor’s statements, didn’t exist at all. The US District Judge Raymond Dearie in Brooklyn, New York, finally ruled that an ICO is a security by definition with regard to federal criminal law.
The criminal case in New York is the first known case which has a direct reference to businessman Maksim Zaslavskiy. He was incriminated with two counts of fraudulence with securities and deceiving of investors by organizing an ICO in fall last year.
With reference to statistics provided by Coinschedule, initial coin offerings raised about $18.7 billion this year. The Chairman of the US Securities and Exchange Commission (SEC) Jay Clayton reported that ICO procedures must be regulated since with ICO expansion, popularity of cryptocurrency and blockchain technology (BT), there are very frequent cases of frauds.
The court's ruling expands authority of SEC with regard to ICO. As such, the ruling can be considered as the first important step to ICO regulation that complies with securities laws, said Peter Henning, a Professor at the Wayne Law Faculty in Detroit.
As previously reported, the officials at SEC will reconsider applications of several companies for the creation of bitcoin ETFs.