US Judge Rules ICO Frauds Fall Under Securities Law

By September 11, 2018ICO
Click here to view original web page at

A U.S. federal judge has ruled that a pair of reportedly fraudulent initial coin offerings fall under securities laws.

District judge Raymond Dearie ruled Tuesday that a criminal case against a pair of allegedly fraudulent ICOs conducted by Brooklyn resident Maksim Zaslavskiy would proceed, denying the defendant's motion to dismiss.

As previously reported, Zaslavskiy has been accused of committing securities fraud for selling tokens which represented shares in a real estate venture and a separate diamond business.

In the motion, Zaslavskiy's lawyers argued that "securities laws are unconstitutionally vague as applied."

However, Dearie wrote, "Congress' purpose in enacting the securities laws was to regulate investments, in whatever form they are made and by whatever name they are called," citing a previous ruling.

He added:

"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."

As such, securities laws are not vague in this matter, meaning that the case will proceed to trial early next year.

Justice image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

District judge Raymond Dearie ruled Tuesday that a criminal case against […]

Leave a Reply