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Connecticut jury finds crypto-related products are not securities

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Connecticut jury finds crypto-related products are not securities​

Once again, the question of whether digital assets constitute securities is under question.


Connecticut jury finds crypto-related products are not securities

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A Connecticut jury has found that digital assets linked to cryptocurrencies are not securities in what a defense lawyer called a world-first verdict.
GAW Miners investor Stuart Fraser was cleared of liability in a fraudulent operation co-opted by ZenMiner LLC on Monday.
“It’s the first case that we know of where a jury addressed whether cryptocurrency products were securities,” one of the defendant’s representatives, Daniel Weiner from Hughes Hubbard & Reed LLP, told Law360.
The case against GAW Miners has been underway since 2017 when co-founder Homero Joshua Garza pled guilty to wire fraud. This left Fraser, a 41% investor in GAW, as the sole remaining defendant in the case.
Initially, GAW sold physical mining hardware but soon teamed up with ZenMiner to offer remote management software that allegedly allowed customers to control their mining hardware online.
According to the plaintiffs, the two companies never actually owned as much equipment as they initially claimed. Earlier in the case, both GAW and ZenMiner were found in default.
Unable to fulfill customers’ orders, the two companies introduced “hashlet contracts,” which entitled their customers to a share of the profits from the company’s crypto mining profits.
However, in 2017, GAW was found to have sold far more hashlets worth of computing power than it actually had in its computing centers. Rather, the company was using the money from new customers to pay off older customers.

The jury decided that none of GAW’s four products, including promissory notes called “hashpoints,” tokens called “Paycoin” and virtual wallets called “Hashstakers,” were considered unregistered securities. Fraser was also found to be not liable.
Although the United States Securities and Exchange Commission described hashlets as securities in its previous case against Garza, the jury in the most recent case against Fraser found that customers actively controlled their hashlets, meaning they could not be considered a passive investment.

 

TAEZZAR

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A Connecticut jury has found that digital assets linked to cryptocurrencies are not securities in what a defense lawyer called a world-first verdict.
GAW Miners investor Stuart Fraser was cleared of liability in a fraudulent operation co-opted by ZenMiner LLC on Monday.
“It’s the first case that we know of where a jury addressed whether cryptocurrency products were securities,” one of the defendant’s representatives,


Probably because they are NOT "secure" :finished: :rotf::rotf::rotf::rotf:
 

solarion

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Who'da thunk the SEC would categorize anything they dislike as an "unregistered security". Ambiguous laws regulations are ambiguous for a reason.

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We've seen so called "penalties" magically morph into "fines" and back again as the situation required as well. TPTB are corrupt to their cores, but they aren't stupid.
 

TAEZZAR

LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH
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We've seen so called "penalties" magically morph into "fines" and back again as the situation required as well. TPTB are corrupt to their cores, but they aren't stupid.
THAT is an inarguable FACT !!!! :holding hands: :finished: :finished:
 

ZZZZZ

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Regulators regulate. "It's what they do. "

They'll NEVER turn down an opportunity to expand their empire and regulate MOAR! MOAR! MOAR!
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TAEZZAR

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Regulators regulate. "It's what they do. "

They'll NEVER turn down an opportunity to expand their empire and regulate MOAR! MOAR! MOAR!
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It is well beyond time to disassemble their empire, but, that is a huge undertaking.
 

newmisty

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I rhetorically ask, how can anything digital be "secure"?
 

the_shootist

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I rhetorically ask, how can anything digital be "secure"?
I couldn't agree more.

Before we had the current GIM silver round logo in the header of this website we had a quote there from a former deceased GIM member named Ponce (you may have heard it mentioned here before) that stated "If you don't hold it, you don't own it!" Ponce was a very bright and interesting guy and his wisdom and advice have been sorely missed here!
 

anywoundedduck

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Some cryptos are the same as what's in the center of a donut.
What gets me is that there are over 5,000 crypto currencies, with every Tom Dick and Harry that can code and build an interactive ledger, and call it the next best crypto of all time. And people still fall for it, and lose their savings and their life, all over an over rated spread sheet.
 

newmisty

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What gets me is that there are over 5,000 crypto currencies, with every Tom Dick and Harry that can code and build an interactive ledger, and call it the next best crypto of all time. And people still fall for it, and lose their savings and their life, all over an over rated spread sheet.
I keep getting bombarded by a VISA "crypto" card advert claiming, " Crypto; the best money we've ever had."

Yeah, O K!
 

TAEZZAR

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newmisty

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You must drink a lot of water. :D
 

TAEZZAR

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You must drink a lot of water. :D

1/2 my body weight in oz. :2 thumbs up: BUT I have lost 30 lbs, so it is less now ! As you noticed, I just got rid of some excess ! :rotf::rotf::rotf::rotf::rotf:
 

Casey Jones

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Hey. Jury nullification at work.

If they want to keep it a Wild-West type of three-card-monte setup...well, the people have spoken. At least in this opening round.

I'm in favor of letting them decide. Any residual belief I had in government regulations - even mundane ones like auto inspections - has been completely wiped away, in the last 22 months.
 

Casey Jones

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I keep getting bombarded by a VISA "crypto" card advert claiming, " Crypto; the best money we've ever had."

Yeah, O K!
It's not the risk of bitcoin futures, or Dogecoin, or even Visa "crypto" that's a risk to us.

It's when the dollar is converted to fedcoin, and it has a switch, and automatic triggers tied to your Healf Pissport and Social Credit.

THAT is when it's time to just start shooting - there's no future.
 

ZZZZZ

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I keep getting bombarded by a VISA "crypto" card advert claiming, " Crypto; the best money we've ever had."

Yeah, O K!

i just got the "Bitcoin Back Black Visa Card" from BlockFI. There's no annual fee, and they gave me a monstrous line of credit that I didn't really ask for or need. But you get 3.5% "Bitcoin back" instead of 1% or 2% cashback like some other credit cards. We'll see how it works out.
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