Exchange Found Statutory Seller Only When Selling From Its Own Inventory

A federal judge in New York has made a crucial ruling on a crypto asset exchange's status as a statutory seller under Section 12(a)(1) of the Securities Act of 1933.

The judge found that when the exchange sold tokens from its own inventory, it was indeed a statutory seller. However, this does not apply to transactions where the exchange simply matched customer buy and sell orders.

This partial resolution addresses a key issue in a putative class action brought by users of the exchange, who claim that the company sold unregistered securities.