US Court Says SEC Lacks Evidence To Prove Blockvest ICO Is A SecurityNov 29, 2018 at 23:59
A San Diego court judge has denied the Securities and Exchange Commission’s order to preliminary injunction against the Blockvest ICO supporters.
In a decision issued Tuesday, US District Judge Gonzalo Curiel of the Southern District of California said the securities watchdog failed to show that investors participated in the Blockvest offering expecting a return of profit from the efforts as others— one of the factors in the “Howey test” which determines a security.
SEC officials have not responded to a request for comment as of press time. But for former SEC lawyers, this shows that even district courts are doing their own probe to see if digital tokens fit the legal definition of securities.
“It is only through these sorts of decisions that we will learn the limits of the SEC’s jurisdiction,” said Paul Hastings LLC’s Nick Morgan was quoted.
“The SEC should not assume that the courts are going to skate over whether or not there is a security present, “ added Morgan, previously senior trial counsel at the SEC.
Paul Hastings is an international law firm with 22 offices worldwide.
The securities regulator alleged Blockvest and its founder, Reginald Buddy Ringgold III, of launching an ICO and claiming it was “licensed and regulated” by several agencies, including the SEC.
However, Blockvest denied the accusations, saying only 32 testers were behind its offering which gained less than $10,000 worth of Bitcoin and Ethereum tokens from them.
In addition, the SEC claimed the BLV tokens were only designed for testing the companies platform.
Although the SEC had shown that some of the venture’s backers had written “Blockvest” or “coins” on their checks to the company, Curiel found that the SEC couldn’t show that the test investors expected to profit.