Clayton has repeatedly said the vast majority of the offerings should be registered and that the coins trade on secondary markets like other securities the SEC regulates. But ICOs have been slow to subject themselves to the agency’s oversight, and just a relatively small number of issuers moving to register. In a January interview, Clayton pledged to sanction more firms “if people don’t change their ways.”
Prosecutors argued that investments offered by Zaslavskiy in the two ICOs -- ReCoin Group Foundation and Diamond Reserve Club -- were "investment contracts" that were securities under federal securities laws. The judge, who on Tuesday rejected the defendant’s request to have the case dismissed, voiced skepticism about the defendant’s arguments that securities laws didn’t apply to him.
“There was no blockchain, no real estate, there were no diamonds," Dearie told the defense at a hearing to dismiss the case in May. "It just wasn’t there. It’s a gossamer. There’s just nothing to it."
Mildred Whalen, a lawyer for Zaslavskiy, didn’t immediately return a voicemail message seeking comment. His client has denied wrongdoing. John Marzulli, a spokesman for Brooklyn U.S. Attorney Richard Donoghue, whose office is prosecuting the case, declined to comment. An SEC spokesman also declined to comment.
This article provided by Bloomberg News.