News

US Federal Judge: ICO Frauds Categorized Under Securities Law

US federal judge, Raymund Dearie, ruled that a criminal case against two allegedly fake initial coin offerings fall under securities laws. The decision was finalized on Tuesday, September 11 at Brooklyn, New York.
The case in question was against a reportedly fraudulent ICOs directed by Maksim Zaslavkiy. The judge ruled that the case would proceed, denying the defendant’s motion to dismiss.
Zaslavskiy is being accused of doing securities fraud by selling tokens which embodied shares in a real estate venture and a diamond business. Prosecutors assert that neither of the real estate venture nor the diamond business actually bought the assets the customers were investing in.
As argued by Zaslavkiy’s lawyers in the motion, “securities laws are unconstitutionally vague as applied” to the accusation against the defendant.
To this, Judge Dearie responded: “Congress’ purpose in enacting the securities laws was to regulate investments, in whatever form they are made and by whatever name they are called,” alluding to a previous ruling.
“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,” he added.
In the exact sense of the word, securities laws as they apply to the indictment and the charges against the Mr. Zaslavkiy are anything but vague, Dearie stated.
It is worth noting that the judge has not stated as to whether ICOs are specifically securities. However, he said that this “can only fairly be a question of proof at trial, based on all of the evidence presented to a jury.”
The Howey Test– a United States official standard for determining whether something is a security- might be applied to Zaslavkiy’s case, Dearie wrote.

“The question is whether the ‘elements of profit-seeking business venture’ are sufficiently alleged in the indictment, such that, if proven at a trial, a reasonable jury could conclude that ‘investors provide[d] the capital and share[d] in the earnings and profits; [and] the promoters manage[d], control[ed] and operate[d] the enterprise.’”

He added: “For present purposed we conclude that they are.”
With that, an analysis of the Howey Test as it could possibly apply will be required for a final determination at trial.
Bloomberg first reported the news.

Related posts
BitcoinBitcoin NewsbtcusdBTCUSDCBTCUSDTNewsxbtusd

Software Giant Palantir Joins the Bitcoin Race, Hints At Gigantic BTC Buy

What do Tesla, Time magazine and WeWork have in common? All companies have, in the last three months, announced either a significant investment in cryptocurrency or a newfound acceptance of it as a means of payment from customers. The most…
cryptocurrencyCryptocurrency NewsebayNewsNFT

NFTs Land Great Feat On eBay

NFTs are everywhere these days. Iconic tweets, digital art, and even memes are being turned into NFTs and sold for everything from a few dollars to millions of dollars each. More and more marketplaces are taking shape to sell NFTs…
cryptocurrencyDOGEdogecoinDOGEUSDElon MuskNewstesla

Dogecoin Blows Hot As ‘Dogefather’ Elon Musk Considers Making DOGE A Payment Option At Tesla

Dogecoin was expected to race to the moon after Elon Musk’s SNL performance, but the asset took the bearish route and dipped until nearly 40% of its value was lost. The crypto went from a high of $0.73 to a…