Crypto Precedent: SEC Lost The Case Against ICO Project Blockvest

The US federal court is in the center of attention in today’s crypto news for ruling a case between the Securities and Exchange Commission and the crypto ICO project named Blockvest in favor of the project.

The chief legal officer at Blockchain made clear:

 “The SEC brought an enforcement action against a company called Blockvest, alleging that Blockvest’s ICO was a securities offering. SEC asked the court for a preliminary injunction (an order freezing Blockvest’s assets, among other things) so it called a hearing on the evidence.”

The SEC couldn’t gather enough evidence to justify that the ICO was a security so the court refused to acknowledge it as a security simply because of the asset’s distribution method.

Although this decision was unexpected, this cannot be seen as a great loss for the SEC, as Jay Clayton, the SEC chairman noted that most of the ICOs that investors are willing to put their money in as considered as securities under the existing US laws. However, this is a precedent for the crypto market and means that future ICO could face with the SEC in court and eventually win a case.

The SEC has now become more wary when filing a lawsuit against a certain ICO project since now the court requires a clear description of the asset’s nature. The blockchain executive added that the court simply took it too far when it rejected an argument from the SEC.

This decision of the federal court has just created a more complex environment for investors but also for the commission when challenging a token issuer.