Brooklyn federal judge rules that Bitcoin is governed by the SEC
U.S. District Court Judge Raymond Dearie decided on Tuesday that the prosecutors for the Eastern District of New York can go ahead with their case against an alleged fraudster, ruling that the Securities and Exchange Commission (SEC) rules apply to bitcoin and initial coin offerings.
According to Bloomberg News, prosecutors accused Maksim Zaslavskiy of committing securities fraud when he offered investments in two initial coin offerings (ICOs) to investors, but never actually bought any of the assets they believed they were investing in.
Zaslavskiy argued that the laws governing bitcoin and ICOs are “unconstitutionally vague.” Judge Dearie disagreed.
“Stripped of the 21st-century jargon, including the defendant’s own characterization of the offered investment opportunities, the challenged indictment charges a straightforward scam, replete with the common characteristics of many financial frauds,” Dearie said, according to BizJournals.com.
Dearie went on to say, “Simply labeling an investment opportunity as a ‘virtual currency’ or ‘cryptocurrency’ does not transform an investment contract — a security — into a currency.”