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>>Then they went after the ones that promised big returns and didn't deliver. The SEC won again. That settled the issue of whether an ICO is a security. It is i

>>Then they went after the ones that promised big returns and didn't deliver. The SEC won again. That settled the issue of whether an ICO is a security. It is if it passes the Howey Test.[1] As far as I know, they never won in court. Everything was settled out of court. A case recently went to court and they lost a key argument: https://twitter.com/msantoriesq/status/1068246911533092866?s=21 https://twitter.com/msantoriesq/status/1068246911533092866?s... Former securities lawyer Louis Cammarosano claimed back in July 2017 that 1. token sales are a threat to Silicon Valley and Wall Street, 2. that the SEC doesn't want to bring an enforcement action if their case is not ironclad because they fear that a court will disagree with their interpretation: https://youtu.be/psqCMwhDxZo?t=12m29s https://youtu.be/psqCMwhDxZo?t=12m29s

Animats 8y ago
Actual court decision.[1] This is just a rejection of a preliminary injunction. The ICO sale hadn't started yet. The court indicated that the line set by the Howey test had not yet been crossed. The ICO issuer agreed to cancel the ICO and not try again without notifying the SEC first. So the judge ruled that there wasn't an imminent threat justifying an injunction. This is not "ICOs are legal, go go go!", despite hype on crypto sites. The big ICO case so far is [2]. This was a criminal prosecution. It didn't go to trial, the scammer pled guilty after the preliminary ruling that an ICO was a security.[3] Zaslavskiy gets sentenced soon. We're way past that claim from July 2017. [1] https://drive.google.com/file/d/1SODrcousHlAKdFRd8Gj32U7lQc-DQX2X/view https://drive.google.com/file/d/1SODrcousHlAKdFRd8Gj32U7lQc-... [2] https://www.bloomberg.com/news/articles/2018-09-11/u-s-judge-says-initial-coin-offering-covered-by-securities-law https://www.bloomberg.com/news/articles/2018-09-11/u-s-judge... [3] https://www.bloomberg.com/news/articles/2018-11-15/first-fraud-case-for-initial-coin-offering-set-for-guilty-plea https://www.bloomberg.com/news/articles/2018-11-15/first-fra...
- CryptoPunk 8y ago
  Yes, the Tweet storm I linked to said as much. The point is when tested by a court, one of the SEC's arguments was rejected. Yes the argument wasn't about the traditional token sale - it was the SEC trying to classify airdrops as a securities issuance - but it does show that the SEC's arguments are not law. Only courts decide what is law. The big ICO case [2] involved blatant fraud, and looked nothing like the tokens being issued in most token sales, so doesn't set a precedent that affects most of the token sales. Everything else has been settled out of court, with none of the SEC's claims accepted by a court. So your claim that "That settled the issue of whether an ICO is a security" is wrong. An out of court settlement does not settle the law.
  - CryptoPunk 8y ago
    With respect to [2], this is what the tokens represented: >>The ruling came in a criminal case against a man charged with promoting digital currencies backed by investments in real estate and diamonds that prosecutors said didn’t exist. That's a traditional security, with the tokens representing physical assets. It is not like most token sales, which are pre-functional utility tokens, which do not purport to confer a legal claim to any asset. Moreover, the individual selling these tokens was blatantly lying about the existence of the real estate and diamonds. So your initial comment is wildly off the mark with respect to what has been "settled" with respect to token sales.

Animats 8y ago

Actual court decision.[1] This is just a rejection of a preliminary injunction. The ICO sale hadn't started yet. The court indicated that the line set by the Howey test had not yet been crossed. The ICO issuer agreed to cancel the ICO and not try again without notifying the SEC first. So the judge ruled that there wasn't an imminent threat justifying an injunction. This is not "ICOs are legal, go go go!", despite hype on crypto sites. The big ICO case so far is [2]. This was a criminal prosecution. It didn't go to trial, the scammer pled guilty after the preliminary ruling that an ICO was a security.[3] Zaslavskiy gets sentenced soon. We're way past that claim from July 2017. [1] https://drive.google.com/file/d/1SODrcousHlAKdFRd8Gj32U7lQc-DQX2X/view https://drive.google.com/file/d/1SODrcousHlAKdFRd8Gj32U7lQc-... [2] https://www.bloomberg.com/news/articles/2018-09-11/u-s-judge-says-initial-coin-offering-covered-by-securities-law https://www.bloomberg.com/news/articles/2018-09-11/u-s-judge... [3] https://www.bloomberg.com/news/articles/2018-11-15/first-fraud-case-for-initial-coin-offering-set-for-guilty-plea https://www.bloomberg.com/news/articles/2018-11-15/first-fra...

CryptoPunk 8y ago
Yes, the Tweet storm I linked to said as much. The point is when tested by a court, one of the SEC's arguments was rejected. Yes the argument wasn't about the traditional token sale - it was the SEC trying to classify airdrops as a securities issuance - but it does show that the SEC's arguments are not law. Only courts decide what is law. The big ICO case [2] involved blatant fraud, and looked nothing like the tokens being issued in most token sales, so doesn't set a precedent that affects most of the token sales. Everything else has been settled out of court, with none of the SEC's claims accepted by a court. So your claim that "That settled the issue of whether an ICO is a security" is wrong. An out of court settlement does not settle the law.
- CryptoPunk 8y ago
  With respect to [2], this is what the tokens represented: >>The ruling came in a criminal case against a man charged with promoting digital currencies backed by investments in real estate and diamonds that prosecutors said didn’t exist. That's a traditional security, with the tokens representing physical assets. It is not like most token sales, which are pre-functional utility tokens, which do not purport to confer a legal claim to any asset. Moreover, the individual selling these tokens was blatantly lying about the existence of the real estate and diamonds. So your initial comment is wildly off the mark with respect to what has been "settled" with respect to token sales.