SEC Met Howey Test In Bitcoin Fraud Suit, Calif. Judge Says

By Emilie Ruscoe (January 8, 2021, 10:42 PM EST) -- Blockchain development company NAC Foundation LLC and its chief executive officer can't shake a U.S. Securities and Exchange Commission civil enforcement action alleging they violated federal laws with a 2017 initial coin offering, a federal judge in California said on Friday.

In a Jan. 8 order, U.S. District Judge Richard Seeborg denied the dismissal request filed by NAC and its CEO Marcus Rowland Andrade, applying the methodology the U.S. Supreme Court established with the 1946 case SEC v. W.J. Howey Co to establish that the SEC had plausibly alleged that the company's ABTC tokens were securities.

"Over defendants' strenuous protestations —...

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