An American court proved using the “Howey test” that the CTR token, widely advertised by Floyd Mayweather from the startup Centra Tech, must be considered a security.
The magistrate judge for the District of Florida is confident that the CTR tokens sold during the crowdsale by the Centra Tech project are securities and are subject to consideration under the current US stock laws. As part of legal proceedings brought by a class action lawsuit by former Centra Tech investors against the founders of the startup, the tokens were recognized as securities according to the “Howey test”.
This is a test developed by Specialists from Coinbase, Coin Center, Union Square Ventures and Consensys. This technique allows tokens to be classified as securities or to refute their affiliation with them within the framework of the federal law on securities regulation. In relation to blockchain tokens, the Howey test is based on the presence of three independent criteria:
- Availability of invested funds;
- Expectation of receiving financial benefits;
- Complete dependence of profits on the activities of others.
According to the Howey test, the CTR token fully satisfies the three main criteria of an investment contract and is considered a security.
It is worth noting that this legal proceeding is in no way related to the charges brought by the Securities and Exchange Commission (SEC) against three organizers of the Centra Tech project who were arrested two months ago.
The Federal District Court for the District of Florida is considering a class action lawsuit by project investors against the organizers of the ICO, during which $32 million was raised. In the lawsuit, the startup organizers are charged with conducting a fraudulent token sale and selling unregistered securities, as a result of which investors lost their funds.
Interestingly, lawyer Stephen Pally, who has extensive experience in legal practice in the field of the crypto industry, noted that this court decision is not a binding precedent for the court law, but can be used as a cited argument in judicial practice, as it is convincing and meaningful.
According to https://www.coindesk.com
You May Also Like
Crypto ATMs were seized from a Russian company at the request of the Central Bank
Last week, on August 31, all crypto ATMs belonging to the company BBFpro were seized by the police without explanation.
South Korean province to issue its own cryptocurrency
According to local news sources, Gyeongbuk, a province on the east coast of South Korea, intends to issue its own cryptocurrency and completely replace the local currency used in the province. The provincial government also intends to open an exchange where new coins will be traded, and residents will be able to use QR codes to accept cryptocurrency.
