Regulators in the US have suffered a setback in their push against ICOs…
In America, the Securities and Exchange Commission (SEC) has been winning few friends in the cryptocurrency industry. It’s failed to ratify a series of Bitcoin-basked exchange traded fund (ETF) applications, and more recently has been ruling against a bunch of ICOs, imposing fines and demanding better communications with investors.
For a minute, though, the proverbial boot appears to be on the other foot.
One of the companies who’d faced the ire of the SEC was a projected called Blockvest. The SEC had argued that Blockvest was a securities offering, and was looking to impose sanctions of sorts as a consequence. Furthermore, it asked the US federal court to grant it a preliminary injunction, that would have frozen the assets of Blockvest, amongst other penalties.
However, that argument was challenged, and the federal court have now, at least for the time being, ruled in favour of Blockvest. The court ruled that the SEC hadn’t actually proven that the Blockvest ICO was a security, and wasn’t willing to back the assertion that it was purely based on the way it was distributed.
This decision wasn’t massively expected, and whilst it may yet be a temporary setback for the SEC, it nonetheless potentially opens the floodgates to other ICOs that have found themselves facing its wrath. More challenges are likely to follow. Furthermore, it may slow down the SEC’s own growing collection of actions as it seeks to cement its own arguments.
Blockchain president and chief legal officer Marco Santori broke the news of the ruling in a Tweet, adding that the court was “explaining what a plaintiff will now have to prove for an ICO to be a security”. The Tweet can be found here.
It’s still a long way from overturning the assortment of actions that the SEC has been following, but it may yet be a crucial turn in the proverbial road.