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The United States Securities and Exchange Commission won a partial victory in its case against blockchain firm Opporty International and its owner — accusing them of conducting a fraudulent initial coin offering (ICO).&nbsp;
In a Sept. 24 memorandum, US district Judge Eric Komitee said the SEC had proved enough of its claim that Opporty and its owner Sergii Grybniak had unlawfully offered the sale of unregistered securities in the US.&nbsp;
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 A US judge handed a partial victory to the SEC. Source: US court
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The SEC announced in January 2021 that it was <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/sec-charges-600-000-ico-project-opporty-for-fraudulent-security-offering" rel="null" target="null" text="null" title="null">taking legal action against</a> Opporty and Grybniak, accusing the company of conducting a fraudulent ICO by offering the sale of “unregistered digital asset securities.”
Judge Komitee said that under the <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/what-are-the-howey-test-and-its-implications-for-cryptocurrency" rel="nofollow noopener" target="_blank" text="null" title="https://cointelegraph.com/news/what-are-the-howey-test-and-its-implications-for-cryptocurrency">Howey test</a>, the OPP tokens sold by Opporty and Grybniak were investment contracts under federal securities laws and needed to be registered with the regulator.
Additionally, the SEC had argued that Opporty and Grybniak’s ICO pre-sale violated Section 5 of the Securities Act of 1933, which deals with the registration and distribution of securities.&nbsp;
Throughout the legal proceedings, Grybniak had argued that the token sale did not need to be registered because it had been conducted under Reg D/S exemptions — which can apply when transactions don’t involve a public offering, and purchasers are either accredited investors or the sales occur outside the US.&nbsp;
The judge found that Grybniak made a reasonable defense in arguing against the SEC’s Section 5 claim, saying the <a data-ct-non-breakable="null" href="https://cointelegraph.com/learn/cryptocurrency-regulation-for-beginners" rel="nofollow noopener" target="_blank" text="null" title="https://cointelegraph.com/learn/cryptocurrency-regulation-for-beginners">SEC’s guidance</a> on crypto offerings had been “so vague and arbitrary that investors have not had a sufficiently definite warning about how the Howey test might apply.”
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/mark-cuban-wants-gary-gensler-job-head-sec" rel="null" target="null" text="null" title="null">Mark Cuban says he wants Gary Gensler’s job as head of the SEC</a>
Still, the judge agreed with the SEC in finding that Grybniak and Opporty failed to meet the exemption requirements of Regulation S, since they “undisputedly engaged in 'directed selling efforts’ in the U.S.”
The Opporty ICO was conducted between September 2017 and October 2018 and raised $600,000 from almost 200 investors, both in the US and abroad. The SEC said Opporty broke its rules by not registering the sale.
Opporty marketed itself as providing a “blockchain-based ecosystem for small businesses and their customers,” primarily in the US. The platform was meant to be a place where small businesses could list their services and enter into agreements via smart contracts.
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/solana-printing-tokens-bots-subsidies/" rel="null" target="null" text="null" title="null">What Solana’s critics get right… and what they get wrong</a>

SEC scores partial win against blockchain firm Opporty over $600K ICO

Cointelegraph

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