A lawsuit over an alleged crypto Ponzi scheme dating back to 2014 may have thrown a big wrench into the U.S. Securities and Exchange Commission’s argument that nearly all cryptocurrencies are securities over which it has authority.

In a ruling that gives “cryptocurrency market participants some much-needed and rarely received comfort,” according to the law firm Troutman Pepper, a federal jury in Connecticut found that four digital assets and products related to a cryptocurrency mining operation were not “investment contracts” subject to state and federal securities laws.

The verdict in “Audet v. Fraser” “will have wide-reaching implications” for two reasons, Troutman argued in a Nov. 22 blog post.

“First, Audet involved four very different crypto products similar to many other crypto or crypto-related products on the market,” it said. “Accordingly, some issuers of such products may conclude that, if litigated, their products would not be considered ‘securities’ and, therefore, not subject to state and federal securities laws. It may strengthen their resolve to litigate or resist enforcement.”

Second, it has the potential to “change the balance of power” between the SEC and the cryptocurrency issuers it has been suing for selling what the agency contends are unregistered securities for several years. In many cases, the agency has forced companies that sold cryptocurrencies in initial coin offerings (ICOs) to pay large fines to avoid litigation…

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