Federal Securities Regulations To Be Applied In Crypto Cases, Judge Rules
He made the ruling in a case where a Brooklyn resident is alleged to have extorted money from crypto investors
Federal Securities Law To Be Applied In Crypto Cases
A Brooklyn federal judge has concluded that laws used in the US securities exchange field can be applied in crypto cases. According to the judge, the laws can be used to charge individuals facing charges of fraud related to digital coins. The ruling is the first by a US court on the issue.
Judge Raymond Dearie made the ruling in a case involving a local resident Maksim Zaslavskiy. Zaslavskiy is accused of defrauding investors using two cryptos allegedly supported by properties and diamonds.
Dearie made the ruling on Tuesday where he stated that federal regulations in the field should be interpreted. In return, he turned down Zaslavskiy’s lawyer's motion seeking to suspend the charges. According to the defence team, digital currency is not under the Securities Exchange Act.
Several media reports indicate that during the case, Dearie failed to cite any court ruling on the application of federal laws in fraud cases. Despite questions from various media outlets, the defence team failed to provide any feedback regarding the ruling. On the other hand, Richard Donoghue from the Attorney department did not give any comment.
REcoin Case Details
Zaslavskiy is alleged to have committed the offence in 2017 where he fraudulently earned $300, 000 from the public in a crypto project dubbed REcoin. He informed investors that it was supported by real estate and diamonds. However, the prosecution argued that there was no backing for the cryptocurrency.
Dearie further added that the accused fate now lies in the hands of the jury who will give the final verdict. He noted that the defence bench will be given a chance to argue their side of the story on whether tokens can be classified as currencies where the securities laws are not applicable.
In March, reports indicated that s senior judge based in New York concluded that the CFTC can control cryptocurrencies as goods.