{"id":9945,"date":"2018-09-11T23:24:50","date_gmt":"2018-09-11T23:24:50","guid":{"rendered":"https:\/\/davidgerard.co.uk\/blockchain\/?p=9945"},"modified":"2018-09-13T07:17:21","modified_gmt":"2018-09-13T07:17:21","slug":"news-the-sec-swings-into-action-marshall-islands-sov-papua-new-guinea-new-stablecoins-indian-crypto-legality-r3-and-ripple-settle-star-xu-of-okex-detained-kodakcoin","status":"publish","type":"post","link":"https:\/\/davidgerard.co.uk\/blockchain\/2018\/09\/11\/news-the-sec-swings-into-action-marshall-islands-sov-papua-new-guinea-new-stablecoins-indian-crypto-legality-r3-and-ripple-settle-star-xu-of-okex-detained-kodakcoin\/","title":{"rendered":"News: The SEC swings into action, Marshall Islands SOV, Papua New Guinea, new stablecoins, Indian crypto legality, R3 and Ripple settle, Star Xu of Okex detained, KodakCoin"},"content":{"rendered":"

A judge rules that an ICO may<\/em> indeed be covered by US securities law.<\/a> (As was obvious to anyone who knew what the Howey test<\/a> was.) The case is the criminal prosecution of Maksim Zaslavskiy’s RECoin and Diamond Reserve Club, which sold tokens backed by real estate and diamonds … that turned out not to exist. Zaslavskiy moved to dismiss the case on the grounds that his tokens weren’t securities, so weren’t in the SEC’s jurisdiction, and that securities law was too vague to be applied to ICOs. Judge Raymond Dearie didn’t buy it \u2014 “Simply labeling an investment opportunity as a \u2018virtual currency\u2019 or \u2018cryptocurrency\u2019 does not transform an investment contract \u2014 a security \u2014 into a currency.” The question of whether RECoin and Diamond Reserve Club really were securities will be a matter for the jury \u2014 but the judge considers the SEC’s claim can go forward.<\/p>\n

The SEC also settled charges<\/a> today against TokenLot, Lenny Kugel, and Eli L. Lewitt for acting as unregistered broker-dealers in the process of selling ICO tokens in their “ICO Superstore” \u2014 because ICOs are securities, so brokers have to register. TokenLot shut down in February 2018 after the SEC called, and gave everyone back their bitcoins and ether. TokenLot’s goodbye page<\/a> (archive<\/a>) talks about their “incredible journey” and blames “the ever changing regulatory landscape of the cryptocurrency space in our jurisdiction” \u2014 specifically, the bit of the regulatory landscape that fined them $569,000 and barred them from penny stocks and investment involvement for three years. Here’s the order.<\/a><\/p>\n

And the SEC temporarily halted US trading in two pretend-ETFs,<\/a> CXBTF and CETHF, for Bitcoin and Ethereum \u2014 they’re based in Sweden at Nasdaq Stockholm,<\/a> but were also traded over-the-counter in the US. Here’s the order.<\/a><\/p>\n

Remember when tiny biotech company Bioptix changed its name to Riot Blockchain, and got a sudden stock pump? The CEO, John O’Rourke, and major shareholder Barry Honig have been charged by the SEC with penny-stock fraud.<\/a> So Riot’s COO is now the CEO. Here’s the SEC press release<\/a> and the full complaint.<\/a><\/p>\n

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Now that the SEC has sued Barry Honig, let's not forget those he sued for defamation for daring to write about him: @buhlreports<\/a> (https:\/\/t.co\/e80bVnhTWc<\/a> & https:\/\/t.co\/KgB4LrrvGi<\/a>) and @Bleecker__St<\/a> (Honig v. Drose: https:\/\/t.co\/IS4fFbGbrL<\/a>)<\/p>\n

— Michael Goode, A.M., DuckLord\ud83e\udd86 (@goodetrades) September 7, 2018<\/a><\/p><\/blockquote>\n