The U.S. is trying to regulate cybercurrency offerings. It still did not clear out whether it is authorized or not.
Federal judges in Brooklyn, New York, are going to handle this. Through handling they can decide whether Bitcoin and other stateless currencies are securities that can be regulated like stocks or bonds. Courts in the country are about to consider these regulations while considering other cybercurrency cases.
Peter Henning, a retired SEC and Justice Department lawyer who is now a professor at Wayne State University Law School said:
“If it’s not a security, then what is it?”
U.S. District Judge Raymond Dearie told he will allow Zaslavskiy’s lawyers in both the criminal and civil cases to examine whether ICOs can be considered a security under U.S. law. The government has until March 19 to file its argument that cybercurrency is a security.
Mildred Whalen, Zaslavskiy’s criminal-defense lawyer said:
“If the judge makes the determination that this is not a security, he’d dismiss the criminal case. He recognizes this is a fundamental issue in both cases. It’s all completely new territory.”
Another judge from the Brooklyn federal courthouse is being asked to regulate on how cryptocurrencies and ICOs should be handled under U.S. laws.
Last Month, SEC accused Dominic Lacroix, whom it called as a “recidivist securities law violator.” The SEC said this Canadian organization announced an ICO called PlexCoin which made the investors in the U.S and around the world register with the U.S authorities or revealing past offenses.
SEC mentioned that Lacroix and his partner Sabrina Paradis-Royer used Twitter, Facebook, and blogs last year to raise about $15 million from thousands of investors. Investors in PlexCoin were told profits would be supported because the firm had almost 50 “market experts” working in Singapore, who had listed the virtual currency on digital asset exchanges and push secondary market trading.
SEC revealed that it was a Scam. Only a few of employees worked for Lacroix in Quebec, and he covered his involvement in the company because he has a history of committing securities fraud in Canada.
Crybercurrencies are the Securities might be found in SEC v. J. Howey Co., a Supreme Court case had decided before seven decades.
“The SEC has certainly chosen to read it a certain way, and different courts have had somewhat varying formulations.”