In a landmark judgement, the US federal court has ruled a case in favour of an ICO project in regards to a securities classification. The case was between the Securities and Exchange Commission (SEC) in the US and token issuer Blockvest where the former alleged that Blockvest's ICO was a securities offering and asked for an injunction.
However, the court ruled in favour of the ICO project after the SEC could not prove that Blockvest's token satisfied the Howey Test. SEC tried to prove that a mere offer like an airdrop is enough to prove that the ICO violated securities laws but the court deemed otherwise. You can read a copy of the entire judgement here.
While many people in the crypto world are celebrating the judgement, this does not necessarily mean that the SEC is on the backfoot. The court's ruling applies only to the Blockvest case and there are plenty of other grounds to classify other ICOs as potential securities offerings.
The SEC has maintained that most tokens are securities and they need to register with the agency or opt for a private placement. Recently, SEC had charged two ICOs - Airfox and Paragon - for a securities violation and slapped them with a heavy $250,00 penalty in addition to asking them to return funds raised to the investors. It had also charged decentralised exchange Etherdelta for running an unregistered securities exchange. Last week, the SEC also went after celebrities and influencers such as Floyd Mayweather and DJ Khaled for promoting ICOs. Will this new ruling change anything? We highly doubt it!