SEC Wins Partial Victory In Case Against Opporty International

According to Cointelegraph, the United States Securities and Exchange Commission (SEC) has secured a partial victory in its legal battle against blockchain firm Opporty International and its owner, Sergii Grybniak. The case revolves around allegations of conducting a fraudulent initial coin offering (ICO) by offering unregistered securities. In a memorandum dated September 24, US District Judge Eric Komitee ruled that the SEC had sufficiently demonstrated that Opporty and Grybniak unlawfully offered the sale of unregistered securities in the United States. The SEC initially announced its legal action against Opporty and Grybniak in January 2021, accusing them of conducting a fraudulent ICO by selling “unregistered digital asset securities.” Judge Komitee determined that the “OPP” tokens sold by Opporty and Grybniak during their ICO were investment contracts under federal securities laws, thus requiring registration with the SEC. The SEC also argued that the ICO pre-sale violated Section 5 of the Securities Act of 1933, which pertains to the registration and distribution of securities. Throughout the proceedings, Grybniak contended that the token sale did not require registration, citing Reg D/S exemptions. These exemptions apply when transactions do not involve public offerings, and purchasers are either accredited investors or the sales occur outside the United States. However, Judge Komitee found that Grybniak’s defense was reasonable but ultimately agreed with the SEC that Opporty and Grybniak failed to meet the exemption requirements of Regulation S, as they engaged in “directed selling efforts” within the US. The Opporty ICO, conducted between September 2017 and October 2018, raised $600,000 from nearly 200 investors both in the US and internationally. The SEC claimed that Opporty violated its rules by not registering the sale. Opporty marketed itself as a “blockchain-based ecosystem for small businesses and their customers,” primarily targeting the US market. The platform aimed to facilitate small businesses in listing their services and entering agreements via smart contracts.