The Federal Court cancels the ICO's claim to SEC as security – Cryptomorrow – Criptovaluta, Bitcoin, Ethereum


A San Diego judge dismissed the US Securities and Exchange Commission's request for a preliminary injunction against the supporters of Blockvest LLC's IPO. In a first federal decision on the initial offer of coins, the judge said that SEC did not prove that the ICO token was a security.
According to the court's decision on Tuesday this week, the court should not look at the "form" but at the "economic realities of the transaction" when deciding whether a token is a security or not.

Although the subjective interest of investors may have partially determined their entry into an "investment contract", the court decided to focus on what was promised or offered by the platform. The court said SEC did not prove that the platform's testers had a "profit expectation".

The SEC filed a complaint in which Blockvest LLC and founder Reginald Buddy Ringgold violated Section 10 (b) of the Exchange Act and Section 17 (a) of the Securities Act in relation to fraud and the offer and sale of unregistered securities. According to the SEC, the company and its leaders were selling presumed non-registered securities in the form of a BLV token. This was allegedly done via an ICO released by the startup, which is basically a cryptocurrency exchange.

Blockvest LLC, which held a pre-sale in March in addition to a private sale in April and ICO in December and collected $ 2.5 million in 7 days during ICO, is according to their white paper, the first exchange and authorized tokenized encrypted index and regulated fund based in the United States. Thus SEC stated that this allegation was false because it had not approved, authorized or approved the cryptic exchange and the fund as requested. SEC claimed that the exchange and fund claimed to be approved or approved by the Commodity Futures Trading Commission ("CFTC") and the National Futures
Association ("NFA"), which, according to SEC, was a false complaint.

Ringgold said the startup did not sell any tokens to the public, but raised money from family members, friends and other platform testers. He said that even if the testers put less than $ 10,000, no BLV tokens were made public. As expected, the BLV tokens were designed to be tested and the testers failed to keep or remove tokens from the exchange.

The plan was to release "the new BLVX utility on NEM Blockchain for exclusive use on BlockVest Exchange." The platform has never been open for businesses. The investments come mainly from Ringgold and the startup CFO, while others have lent money for the investment and have not purchased tokens. According to the SEC, the defendants admitted that they had received funds from 32 investors in the expected BLV token promise.

Ringgold claimed that the company intended to comply with any regulation and regulatory agency. He also claimed to have stopped his efforts to proceed and agreed not to proceed with the ICO until he gave 30 days' notice to the SEC lawyer.

The court stated that since the Securities Act prohibits not only the sale, but also the offer of an unregistered, non-exempt title, the fact that buyers choose not to accept the full offer is not valid.

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