A federal judge in New York has ruled initial coin offerings are covered by U.S. securities law.
The ruling came Tuesday in a criminal case against a man charged with promoting digital currencies backed by investments in real estate and diamonds that prosecutors said didn’t exist. U.S. District Judge Raymond Dearie in Brooklyn, N.Y., said the government can proceed with a case alleging an initial coin offering is a security for purposes of federal criminal law.
This is what officials at the Securities and Exchange Commission have been saying for months now. Peter Henning, a professor at Wayne State University’s law school in Detroit, told Bloomberg the ruling “affirms the SEC’s position that it has authority over ICOs and that market manipulation and anti-fraud provisions in the law apply.” Read more here.