Lawsuit filed against ATB ICO

The plaintiff asserts that the company violated the securities law
28 December 2017   372

On December 21, a class action was filed against ATBCoin and its founders. This is reported by CoinDesk.

Raymond Balestra filed a class action suit in the Southern District of New York against ATBCoin LLC, Edward Ng (CEO) and Herbert W. Hoover (co-founder). The plaintiff asserts that the company violated the law on securities, since it issued unregistered securities that allow its holders to rely on income in the coins of ATB.

The ATB ICO was a clear offer and sale of securities because, inter alia [among other things], Defendants touted, and Plaintiff and other ATB ICO investors reasonably expected, that the ATB Coins received in exchange for their investments would be worth more than the ETH, BTC, LTC or other currencies invested.

Lawsuit against ATB ICO

The sale of tokens of a fast and low-cost payment system based on the ATB blockchain started on July 12 and ran through July 12, according to the company's blog. According to the plaintiff, in August, ATBCoin launched the second part of the campaign and continued to attract funding even in September.

The plaintiff invested 2.1 ETH on 12 August. How much money was collected during the ICO is not reported, but the prosecution claims that this value is in the range between $ 20,400,000 and $ 24,210,000 in equivalent in BTC, ETH and LTC.

There is no information about this situation on the official chanels and website of the project. ATB Coin support refused to comment this situation in projects Telegram. 

Tezos is another ICO project with lawsuits against it. 

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Swiss Regulators Published ICO Guidelines

The Swiss Financial Market Supervisory Authority FINMA published today initial coin offering (ICO) guidelines  
16 February 2018   166

The guidelines set out how it intends to apply financial market legislation in handling inquiries from ICO organizers. According to it, regulators will oversee and regulate ICOs anti-money laundering laws.

FINMA clarifies how token issuers should proceed in the country. The regulator also stated that there is a sharp increase in the number of Switzerland-based ICOs. This led to questions about applicable regulations.

The press release noted that financial market law and regulation aren’t applicable to all ICOs. Each case must be decided on its individual merits.

The regulations will be based on economic function and purpose of the tokens issued by the ICO organizer. Due to the fact that there is no generally recognized terminology for the classification of tokens in the world,  FINMA categorizes tokens into three types:

  • Payment tokens are synonymous with cryptocurrencies and have no further functions or links to other development projects.

  • Utility tokens are tokens which are intended to provide digital access to an application or service.

  • Asset tokens represent assets such as participation in real physical underlyings, companies, or earnings streams.  

FINMA will handle ICO inquiries according to three different categories, based on the type of tokens they’ll be issuing.

  • Payment ICOs (payment tokens), that issue tokens that are transferable and function as means of payment.

  • Utility ICOs (utility tokens), that will not qualify as securities, as long as their purpose is to confer digital access rights to an application or service. If a utility token functions as an investment in economic terms, it will be treated as a security.

  • Asset ICOs (asset tokens), that issue tokens that will be seen as securities. This means they’ll be treated like equities or bonds. These will be subject to strict requirements.

Our balanced approach to handling ICO projects and inquiries allows legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with our laws protecting investors and the integrity of the financial system.

Mark Branson