{"id":20849,"date":"2018-11-29T20:08:36","date_gmt":"2018-11-29T20:08:36","guid":{"rendered":"http:\/\/ci027cfe80f00526c3"},"modified":"2018-11-29T20:08:36","modified_gmt":"2018-11-29T20:08:36","slug":"us-district-judge-turns-back-sec-request-regarding-icos","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/culture\/us-district-judge-turns-back-sec-request-regarding-icos","title":{"rendered":"U.S. District Judge Turns Back SEC Request Regarding ICO"},"content":{"rendered":"
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A new development has arisen in the U.S. Securities and Exchange Commission\u2019s (SEC) efforts to regulate ICOs: a District Judge has turned back a request for an injunction.<\/p>\n

According to a recent legal briefing<\/a>, San Diego District Judge Gonzalo Curiel has been presiding over a case<\/a> between the SEC and the startup company Blockvest. On November 27, 2018, although Judge Curiel had previously \u201cgranted the SEC\u2019s ex parte request for a temporary restraining order and froze the assets involved in the ICO,\u201d he has now stated that the SEC couldn\u2019t demonstrate that buyers of Blockvest\u2019s ICO expected to receive a profit. <\/p>\n

The SEC\u2019s regulations regarding ICOs are a tricky and largely unresolved legal area, but this case and others<\/a> have explicitly cited one 1946 court case: SEC vs. W.J. Howey Co. This case first codified into law that certain assets can be considered securities, and become subject to securities regulations, based on the way that sellers and customers handle them. <\/p>\n

One of the critical criteria for an offering such as an ICO to become a security under the Howey statute is for customers to demonstrate an expectation that they will eventually make more money from the purchase. According to Curiel\u2019s recent comments, customers of the Blockvest ICO were under no such illusion. <\/p>\n

Curiel\u2019s comments by themselves do not constitute a legal verdict, and the case is by no means sealed. The briefing went on to state that former representatives of the SEC believe that this case \u201csends a message to the agency that courts are paying close attention to the question of whether digital tokens fit the legal definition of a security.\u201d<\/p>\n

In other words, this is a concrete example of the court system showing a willingness to treat ICOs as if they are not necessarily tied to securities regulations. Legal commentators on the briefing included the sentiment that \u201cit was obvious that the judge had studied the facts and the applicable precedent\u201d as it applied to the case. <\/p>\n

For now, Judge Curiel\u2019s reversal will mean that Blockvest\u2019s assets are no longer tied up by the initial freeze order that the SEC was granted, and it will be better equipped to mount a defense should the SEC bring more charges against them. <\/p>\n

\u201cIt is an extraordinary challenge for defendants facing freeze orders and restraining orders obtained ex parte by the government,\u201d said Stanley Morris, representing the defendants. He added that \u201cour clients are now free to defend themselves through trial and look forward to being vindicated.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

This is a concrete example of the court system showing a willingness to treat ICOs as if they are not necessarily tied to securities regulations.<\/p>\n","protected":false},"author":2545,"featured_media":20850,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[1267,3240,183],"class_list":{"0":"post-20849","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-culture","8":"tag-california","9":"tag-icos","10":"tag-sec"},"author_data":{"id":2545,"name":"Landon Manning","nicename":"landon-manning","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/12\/img_2749-96x96.jpg"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/us-district-judge-turns-back-sec-request-regarding-ico.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/20849","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2545"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=20849"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/20849\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/20850"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=20849"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=20849"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=20849"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}