Recently, a court decision has been issued by the District Judge in Brooklyn, according to which the initial coin offerings should fall under the jurisdiction of laws that regulate securities.
Such judgment arose from the court case involving Maksim Zaslavskiy, who was prosecuted for promotion of a fraudulent token sale. Zaslavskiy has allegedly deceived financiers to illegally obtain over 300,000 US dollars from them using the REcoin fraudulent initial coin offering.
A year ago, The US Securities and Exchange Commission pressed charges against Zaslavskiy and his firms, accusing him of deceiving financiers using an array of token sale frauds, REcoin included. The latter was promoted to financiers as being supported by real estate and precious jewels, none of which virtually existed.
According to the court decision, J. Dearie rejected the plea of Zaslavskiy’s lawyers for the dismissal of the accused, because initial coin offerings connected with the pressed charges were digital currencies and not securities, which made the SEC Act incompetent to issue judgments.
J. Dearie made a decision that ICOs in fact should be rendered securities for the needs of federal criminal legislation, which was the center of the last year’s argument between the prosecutors.
This is the first court precedent of treating ICOs as securities, which can possibly affect the market of initial coin offerings, enabling conditions for future precedents to take place.