US Judge Says ICO Frauds Fall Under Securities Law
A US Federal Judge has ruled that a fraud related to Initial Coin Offerings (ICO) falls under the securities law.
The case was filed against Maksim Zaslavskiy who is a resident of Brooklyn, New York for allegedly conducting fraudulent ICOs. The investors were promised that the tokens issued were backed by Real Estate and Diamonds, which prosecutors said never existed.
On Tuesday, District Judge Raymond Dearie denied the motion to dismiss the case, Zaslavskiy has been charged with a criminal case for committing securities fraud. According to Bloomberg, the judge agreed that “an initial coin offering is a security for purposes of federal criminal law.”
It is important to note that the above case falls under security token category as it was claimed to be backed by real-world assets, this case does not provide any clarity on what most ICOs claim their tokens to be which are utility tokens.
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