Last summer, the Securities and Exchange Commission (SEC) issued its 21(a) report concluding that, according to the U.S. Supreme Court decision in SEC v. W.J. Howey Co., the DAO token qualified as a “security” under the federal securities laws and thus, its offering had to either be registered with the SEC or subject to a valid exemption from registration. While many commentators have focused on the implications of Howey on initial coin offerings (ICOs), few have focused on the efforts by the SEC and class action plaintiffs to go after ICOs intended for foreign shores and investors. In an article published by BlockTribune this month, Partner Marc Powers, Counsel Jonathan Forman and Associate Tiffany Miao focus on important jurisdictional issues emerging in these litigations. The article discusses the SEC v. PlexCorps case filed in the E.D.N.Y., in which the SEC has sued a Canadian issuer and residents who took pains to avoid sales of their ICO to U.S. investors. The authors discuss the way the SEC is seeking discovery to prove the U.S. court has subject matter jurisdiction over the securities violations alleged, and that the court has personal jurisdiction over the foreign defendants. The case and article are meant to highlight that, contrary to popular belief, a good number of foreign ICOs may not be immune to potential suit in the United States.
