So why is a securitized trust real estate loan contract defrauding homeowners not also a securitized transaction in relation to borrowers?
Lexology-
A federal district court has—for the first time—agreed with the SEC that initial coin offerings (ICOs) could be considered securities offerings and has allowed a criminal case alleging violations of securities laws arising from an ICO to proceed to trial. The case, U.S. v. Zaslavskiy, 17 cr 0647, involves Maksim Zaslavskiy’s offering of two purportedly asset-backed tokens, REcoin (backed by real estate) and Diamond tokens (backed by diamonds).
According to its white paper, REcoin was backed by domestic and international real estate investments and led by an experienced team of brokers, lawyers, and developers. Meanwhile, Diamond was promoted as a virtual ecosystem that offered members cryptocurrency tokens hedged by physical diamonds stored in secure locations and fully insured for their value.
Prosecutors alleged these were all misrepresentations, as Zaslavskiy did not purchase any real estate or diamonds, did not hire a team, and never developed any REcoin or Diamond tokens. These allegations, among other alleged misrepresentations, formed the basis for the indictment charging Zaslavskiy with conspiracy and securities fraud.
[LEXOLOGY]
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