In what appears to be the first court case in the United States to deal with the issue, an NYC federal judge has ruled that United States securities regulations are valid for putting on trial crypto fraud allegations; this is according to the report.

Raymond Dearie, United States District Judge, ruled that the case opposing Maksim Zaslavsky resident of Brooklyn, which claims that he takes advantage of investors in two digital currencies reportedly supported by real estate and diamonds, can go on.

Raymond Dearie ruled Sept, 11, Tuesday, which federal securities regulations must be interpreted supplely dismissing motion from Maksim Zalavsky attorneys to drop the cases on the grounds which the digital currencies did not fall under the ruling of Securities Exchange Act.

According to Judge Dearie, the question is whether the factors of a revenue-seeking- business venture are adequately alleged in the accusation, such that, one proven at law of court, a reasonable judge could wrap up that investors provide the principal or capital and share in the profits and earnings; and the promoter manage, control as well as operate the business. For present purposes, they finish off that they are.

According to the reporters, the statement coming from New York federal judge and other filings in the case against Zaslavskiy did not bring up any related court decisions on applying federal securities law to fraud cases related to digital currencies.

Lawyers for Zaslavskiy didn’t reply to the questions thrown by the reporters. Richard Donogue, United States Attorney office spokesperson who is handling the case, refuses to give his comment as well.

Prosecutors have asserted that in the year 2017, Zaslavskiy gained almost USD300,000 from investors for a digital coin called REcoin that claimed to be supported by real estate, Diamond, backed by diamonds. Also, prosecutors allege that no diamonds or real estate supported or backed the cryptocurrency or any digital assets.

Raymond noted that it would be in the hand of the judge to make an ultimate decision; he also added that the lawyers of Zaslavskiy would be able to make the case in court which the above-mentioned tokens must be regarded currencies, making securities regulations not appropriate and related.

Earlier in March, the reliable source also publicized that another federal jury from Brooklyn ruled that the CFTC or Community Futures Trading Commission as the ability to regulate digital currencies like BITCOIN or BTC for short as commodities.