The U.S. Securities and Exchange Commission (SEC) remains focused on redefining exchange and trading system definitions. Additionally, the regulator has secured a partial victory in the case against Opporty International. Meanwhile, Swan Bitcoin filed a lawsuit against former employees for code theft and launching a competing firm.
SEC Reworks Exchange Definitions
The SEC, led by Gary Gensler, is still revising the definitions of “exchange” and other trading systems. These changes have drawn much criticism from the crypto community. One of the key changes includes expanding the definition of “dealer” to encompass a wider range of market participants. This change, proposed in 2022 and adopted earlier this year, met resistance from pro-crypto figures. Additional regulatory updates concern the definition of “exchange” and alternative trading systems. The SEC proposed that platforms acting as market makers for government securities must meet new registration requirements. The proposal also addressed decentralized finance (DeFi). Registered alternative trading systems like Prometheum and tZero have become the first and only firms to receive special-purpose broker-dealer status for digital assets, allowing them to provide custody services.
Court Sides with SEC in Opporty Case
The SEC secured a partial victory in its legal case against Opporty International and its owner, Sergii Grybniak, for conducting an unlawful ICO. Judge Eric Komitee ruled that Opporty and Grybniak unlawfully sold unregistered securities in the U.S. The Opporty ICO conducted from September 2017 to October 2018 raised $600,000 from approximately 200 investors. The judge found that OPP tokens met the criteria for investment contracts under the Howey test and should have been registered with the SEC. Additionally, the court stated that Opporty did not qualify for an exemption under Regulation S, as the company engaged in direct selling efforts within the U.S.
Swan Bitcoin Sues Ex-Employees
Swan Bitcoin filed a lawsuit against former employees for stealing software code and creating a competing mining firm, Proton Management. The lawsuit, filed on September 25, alleges that the former employees convinced Tether to sever its partnership with Swan and collaborate with Proton. The lawsuit also claims that the group planned to undermine Swan’s market position. Swan seeks a permanent injunction, the return of stolen equipment and confidential information, and compensation for damages.
The SEC continues to actively revise exchange regulations and strengthen its oversight of digital assets. Legal victories and ongoing cases against crypto companies demonstrate the regulator's determination to enforce compliance with the law.
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