The Southern District of California court refused to recognize the Blockvest project token as a security, concluding that the US Securities and Exchange Commission (SEC) failed to prove that it is such in the context of US law. He writes about CCN.
According to the SEC, Blockvest resorted to various manipulative tactics during its ICO, including the creation of the Commission for blockchain-exchanges, designed, as stated, to create the appearance of regulating its proposal. The commission, however, turned out to be a functioning organization, albeit a non-governmental one.
Judge Gonzalo Curiel, in particular, stated that the SEC could not prove that any Blockvest promotional materials served as a tool for attracting investors, and that it was not enough to recognize the token as a security in accordance with Howie’s test. In addition, the project itself has already abandoned the ICO.
The total amount of funds raised by Blockvest did not reach $ 10,000, distributed among 32 investors.
Representatives of Blockvest, in turn, confirmed that the project tokens were used exclusively for testing on stock exchanges. It was also pointed out that plans to collect $ 2.5 million turned out to be overly optimistic.
Nevertheless, it cannot be ruled out that other accusations may be brought against Blockvest. In particular, the defense did not dispute the fact that the startup’s proposal was not registered. The SEC can also change the line of charges and try to transfer the Blockvest case to another court.
Earlier this week, SEC CEO Jay Clayton spoke about the position of the regulator in relation to the primary offers of coins, noting that Bitcoin does not have the properties of securities.