US Court Does Not Recognize Token Of Blockvest As Security
Following a hearing in the California District Court, it was decided not to recognize the Blockvest’s token as security because the US Securities and Exchange Commission (SEC) could not prove that it is the case, CCN reports.
SEC believes that Blockvest used all sorts of tricks during the ICO, right up to the opening of a specific organization — the Blockchain Exchange Commission, which was supposed to regulate the initial coin offering. This organization actually existed, although it was a non-state one.
According to the court, the SEC did not provide sufficient evidence that the Blockvest token could be considered security according to the Howey Test, a method developed by the US Supreme Court. Moreover, the company itself decided to abandon its ICO.
The Blockvest experts asserted that their tokens were used only for tests on crypto exchanges. During the ICO, 32 depositors invested their funds, and the total amount of funds raised was about $10,000. The company's plans to attract $2.5 million failed to materialize.
The SEC may not stop at this stage and attempt to apply to another US court having changed the argument. Besides, new accusations may be brought against Blockvest. For instance, the company lawyers agreed with the allegation that the ICO failed to register.
As previously reported, the SEC launched an investigation into the token sale of Salt Lending Holdings, a crypto credit company.