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ARTICLE · 11 OCTOBER 2017

SEC Targets Digital Token Issuer In First-Ever ICO-Related Enforcement Action

Pryor Cashman LLP
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Tokens issued in the ICOs were purportedly backed by investments in real estate and diamonds.

United StatesTechnology
E. Scott Schirick
E. Scott Schirick
Marion R. Harris
Marion R. Harris
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On September 29, 2017, the SEC filed its first ICO-related enforcement action, SEC v. REcoin Group Foundation, LLC, et al., No. 17 Civ. 5725, in the Eastern District of New York. This represents the SEC's first formal enforcement proceeding against an issuer of digital tokens. As part of the action against Maksim Zaslavskiy and his related companies, the SEC also sought and obtained orders freezing the defendants' assets. (Although the SEC has previously announced its investigation of The DAO, this earlier announcement took the form of a more rarely used "Report of Investigation" pursuant to Section 21(a) of the Securities Exchange Act, and expressly disavowed any enforcement action. See our prior blog post on this investigation.)

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