The campaign for the initial coin offering (ICO) fall under the legislation in the field of securities, at least in the criminal aspect. Such a verdict was made on Tuesday, September 11, District Judge Brooklyn Raymond Deary, Reuters reports.
In particular, the judge recognized as lawful the criminal prosecution of US citizen Maxim Zaslavsky, who was arrested last November on charges of deceiving cryptocurrency investors and conducting two fraudulent ICOs.
Zaslavsky collected at least $300 thousand. He was selling RECOin tokens, which, he said, were secured by real estate, as well as Diamond coins allegedly secured by a real diamond business. Prosecutors, however, disagree with him and stress that the tokens were not released at all.
In March, the lawyers of the accused filed a petition asking them to drop the charges, since the case is connected with currencies, not with securities, and does not fall under the securities law.
However, on Tuesday, September 11, Deary rejected the petition and stressed that the application of the federal law on securities should be “flexible.” He noted that the Securities and Exchange Commission (SEC) also considers some cryptocurrencies as securities.
Recently in June, representatives of the SEC recognized that Bitcoin and Ethereum are not securities.