TechFlow reported on September 27 that the U.S. Securities and Exchange Commission (SEC) won a partial victory in its lawsuit against blockchain company Opporty International and its founder Sergii Grybniak. Opporty was accused of selling "unregistered securities" for raising $600,000 through an initial coin offering (ICO) in 2018.
U.S. District Judge Eric Komitee ruled in a memorandum on September 24 that the SEC’s partial allegations were established, namely that the “OPP” tokens offered by Opporty and Grybniak in the United States were investment contracts that should be registered under federal securities laws. The SEC also charged that Opporty’s ICO presale violated Section 5 of the Securities Act of 1933, which regulates the registration and distribution of securities.
While Grybniak argued that its token sale met the Reg D/S exemption criteria, the judge ruled that Opporty failed to meet this requirement because they conducted “direct sales activities” in the U.S., which was not exempt from registration. Opporty’s ICO was conducted from September 2017 to October 2018 and attracted approximately 200 U.S. and international investors.