Court Questions Whether Token is a Security
Categories: Banking & Finance, Hi-Tech
In a setback for the Securities and Exchange Commission, a federal district court has denied a motion for a preliminary injunction against a token issuer and its founder because the SEC failed to demonstrate that the tokens were securities. The decision does not necessarily add clarity to the question dominating the crypto-asset space – whether tokens are securities subject to the federal securities law. Rather, the court found that at the initial stage of the proceeding, before discovery, the SEC simply had not met its burden of establishing that the tokens were a security.
