US Judge: Centra Tech tokens were securities

Cryptocurrency-related Centra Tech has collapsed, but its fraudulent business history is still being reviewed in American courts driven by the lawsuits of angry investors. The enterprise tokens status has recently been clarified by Magistrate Judge Andrea Simonton (Florida). Note that he is not present on the photo above.

"Because the success of Centra Tech and the Centra Debit Card, CTR Tokens, and cBay that it purported to develop was entirely dependent on the efforts and actions of the Defendants, the third prong is satisfied. Therefore, the offering of Centra Tokens was an investment contract under the Securities Act, such that the Defendants sold or offered to sell securities by virtue of the Centra Tech ICO."

As a reminder, Centra Tech founders have been apprehended this year, and big exchanges quickly turned their backs on the project, swiftly delisting the token. The conclusion above is not entirely new for America - the Securities and Exchange Commission shares the same approach. But it might be the first precedent when the principle of equality of tokens to securities is confirmed in court. Both the SEC and the court in the Southern District of Florida are motivated by the Howey test.

Image: Daniel Portnoy Photography