Coin Offerings Are Securities, U.S. Says in First Criminal Case

The U.S. Justice Department and SEC are urging a federal judge not to dismiss the first criminal securities fraud indictment against an initial coin offering operator, saying the cryptocurrencies he offered fit the definition of securities.

Maksim Zaslavskiy’s two ICOs were securities offerings, despite Zaslavskiy calling them currencies, the Justice Department said in a March 19 memo in the U.S. District Court for the Eastern District of New York. No federal judge has yet ruled on whether ICOs constitute securities offerings.

Because Zaslavskiy’s sale of business interests sought investments in a common scheme and promised purchasers a return on their ...