• Advertise
  • Submit a Press Release
NewsBTC
Bitcoin & cryptocurrency news
Crypto.com Logo
  • Home
  • News
    • Bitcoin
    • Ethereum
    • Cardano
    • Dogecoin
    • Ripple
    • DeFi
    • NFT
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • Play GamesTry
  • Bet & WinTry
  • Bitcoin Casino ReviewsTry
No Result
View All Result
  • Home
  • News
    • Bitcoin
    • Ethereum
    • Cardano
    • Dogecoin
    • Ripple
    • DeFi
    • NFT
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • Play GamesTry
  • Bet & WinTry
  • Bitcoin Casino ReviewsTry
No Result
View All Result
NewsBTC
No Result
View All Result
court onecoin crypto
Nexo Logo

US Court Ruling: Initial Coin Offerings Covered by Securities Law

Cole Petersen by Cole Petersen
4 years ago
in ICO
Reading Time: 3 mins read
Advertisement

A new ruling by a federal judge in New York has put Initial Coin Offerings under the umbrella of securities law, in a first-of-its-kind legal case against a man charged with promoting digital currencies that were supposedly backed by non-existent real estate and diamonds.

The case, being held in a Brooklyn, New York, court, ultimately resulted in a win for federal prosecutors, who gained Judge Raymond Dearie’s favor in both the prosecution of the defendant, Maksim Zaslavskiy, and as the classification of Initial Coin Offerings as securities.

The ruling regarding the classification of ICOs was a key part to the case because Zaslavskiy’s lawyers built their case on the premise that “security laws are unconstitutionally vague as applied.”

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

Judge Dearie responded to the defendant’s claim, saying that:

“Congress’ purpose in enacting the securities laws was to regulate investments, in whatever form they are made and by whatever name they are called… Stripped of the 21st-century jargon, including the defendant’s own characterization of the offered investment opportunities, the challenged indictment charges a straightforward scam, replete with the common characteristics of many financial frauds.”

SEC Charges ICO Superstore with Operating as Unregistered Broker-Dealer Following Ruling

Following the ruling by Judge Dearie regarding the classification of ICOs as securities, the SEC announced that they had charged and reached agreements with two companies and their owners that were operating illegally in the US.

The first company charged by the SEC is TokenLot, a self-described ICO Superstore, that settled charges with the SEC as operating as an unregistered broker-dealer. The SEC also charged the owners of the site, noting that Lenny Kugel and Eli L. Lewitt had “promoted TokenLot’s website as a way to purchase digital tokens during initial coin offerings (ICOs) and also to engage in secondary trading.”

BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?
Get 110 USDT Futures Bonus for FREE!

According to the SEC, the Michigan-based company has received over 6,100 orders from investors for more than 200 digital token offerings, many of which the SEC deemed as securities. In order to offer securities to US-based investors, companies must register as a broker-dealer, and if they don’t they can be subjected to multiple charges.

Stephanie Avakian, the Co-Director of the SEC’s Enforcement Division, spoke about the importance of broker-dealer registration, saying:

“U.S. securities laws protect investors by subjecting broker-dealers and other gatekeepers to SEC oversight, including those offering ICOs and secondary trading in digital tokens. We continue to encourage those developing digital asset trading businesses to contact the SEC staff at [email protected] for assistance in analyzing registration and other securities law requirements.”

It is important to note that although TokenLot was operating illegally, they cooperated fully with the SEC, which led to much lighter charges than their actions would have otherwise resulted in.

Read our comparison of 50 different crypto casinos. Find out who has most generous bonuses, best UX, knowledgeable customer support and best provably fair games.

Steven Peikin, also the Co-Director of the SEC’s Enforcement Division, discussed TokenLot’s cooperation, saying:

“The penalties in this case reflect the prompt cooperation and remedial actions by TokenLot, Kugel, and Lewitt. TokenLot, Kugel, and Lewitt provided valuable information to Commission staff, stopped the conduct, and refunded money to investors.”

In addition to settling the charges with TokenLot, the SEC also moved against Crypto Asset Management LP (CAM), a cryptocurrency hedge fund that had been operating illegally in the US, while falsely claiming to be the “first regulated crypto asset fund in the United States.”

The fund’s manager, Timothy Enneking, had raised more than $3.6 million over a four-month period from investors, while falsely claiming that his operation was completely registered with the SEC. Also, the SEC claims that more than 40% of the assets in his fund are digital securities, making his fund an unregistered investment company.

Dabney O’Riordan, the SEC’s Co-Chief of the Asset Management Unit, spoke about the rise of unregistered crypto hedge funds, saying:

“Hedge funds seeking to ride the digital asset wave continue to proliferate. Investment advisers must be sure that the funds they offer adhere to the applicable registration obligations and must accurately represent their funds’ regulatory status to investors.”

It is likely that the SEC will begin moving to charge more illegally operating funds and companies following the classification of ICOs as security offerings.

Featured image from Shutterstock
Tags: fraudICOregulationScamssecsecurities
Tweet123Share196ShareSend
Win up to $1,000,000 in One Spin at CryptoSlots
Cole Petersen

Cole Petersen

Cole is a cryptocurrency analyst based in Los Angeles. He studied at the University of California Irvine and has been interested in Bitcoin and the crypto markets since 2013.

Related Posts

iota

IOTA Price Hits 3-Year High as Focus Shifts on IoT Protocol Overhaul

1 year ago
altcoin crypto bitcoin ieo ethereum

This Class of Once Hyped Altcoins Is Headed To Zero

3 years ago
crypto optimism

Crypto CEO Optimistic Over US Regulatory Outlook

3 years ago
cryptocurrency bitcoin scam

Zambian SEC Warns Investors About Scam Cryptocurrency Investments

3 years ago
bitcoin, ethereum

Ethereum Stays in Massive Downtrend Against Bitcoin

3 years ago
Kin Appeals to Crypto Space for Help with Legal Fees to Fight SEC for Regulatory Clarity

ICO Law Specialist Calls for Kik CEO to Stand Down in Crypto/Securities Case vs SEC

3 years ago

Premium Partners

Top Brokers

PrimeXBT

PrimeXBT

Review · Visit

Top Casinos

BitStarz

BitStarz

Review · Visit
7BitCasino

7BitCasino

Review · Visit
Punt Casino

Punt Casino

Review · Visit
mBit

mBit

Review · Visit
CryptoGames

CryptoGames

Review · Visit
Bspin

Bspin

Review · Visit

Sportsbooks

1xBit

1xBit

Review · Visit

The Main Reason Why GNOX (GNOX) Could Flip Dogecoin (DOGE) And Shiba Inu (SHIB) In 2023

August 8, 2022

The Next Bullish Wave in Crypto Could Generate Huge Profits for Uniglo (GLO), Fantom (FTM), and Optimism (OP)

August 8, 2022

The FishVerse Announces the First Ultimate Fishing Metaverse

August 8, 2022

Bware Labs announces the Blast Incentivized Testnet, code-named Houston

August 8, 2022

MEXC to List AURA Network, Supporting NFTs Adoption for More Possibilities

August 8, 2022

ABOUT US

NewsBTC is a cryptocurrency news service that covers bitcoin news today, technical analysis & forecasts for bitcoin price and other altcoins. Here at NewsBTC, we are dedicated to enlightening everyone about bitcoin and other cryptocurrencies.

We cover BTC news related to bitcoin exchanges, bitcoin mining and price forecasts for various cryptocurrencies.

COMPANY

  • Advertising
  • Comments Policy
  • Privacy Center
  • Sitemap
  • About Us
  • Contact

Technical Analysis

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Ripple (XRP)
  • Chainlink (LINK)
  • Cardano (ADA)
  • Tezos (XTZ)

LINKS

Crypto Prices from Nomics

Cryptocurrency news

  • Bitcoin
  • Ethereum
  • Ripple
  • Chainlink
  • Cardano
  • EOS
  • Tezos

© 2021 NewsBTC. All Rights Reserved.

  • Home
  • News
    • Bitcoin
    • Ethereum
    • Cardano
    • Dogecoin
    • Ripple
    • DeFi
    • NFT
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • Play Games
  • Bet & Win
  • Bitcoin Casino Reviews

© 2021 NewsBTC. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.