Verdict Undermines SEC Control of Crypto

 Verdict Undermines SEC Control of Crypto

A lawsuit over an alleged crypto Ponzi scheme dating back to 2014 may have thrown a big wrench into the U.S. Securities and Exchange Commission’s argument that nearly all cryptocurrencies are securities over which it has authority.

In a ruling that gives “cryptocurrency market participants some much-needed and rarely received comfort,” according to the law firm Troutman Pepper, a federal jury in Connecticut found that four digital assets and products related to a cryptocurrency mining operation were not “investment contracts” subject to state and federal securities laws.

The verdict in “Audet v. Fraser” “will have wide-reaching implications” for two reasons, Troutman argued in a Nov. 22 blog post.

“First, Audet involved four very different crypto products similar to many other crypto or crypto-related products on the market,” it said. “Accordingly, some issuers of such products may conclude that, if litigated,…

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