Judge Finds Crypto Exchange Statutory Seller for Some Transactions

A federal judge in New York has made a key ruling on the classification of a crypto asset exchange's role in transactions.

The court found that the exchange is considered a statutory seller under Section 12(a)(1) of the Securities Act of 1933 when it sells tokens from its own inventory, but not when it matches customer buy and sell orders.

This decision partially resolves a threshold issue in a putative class action alleging that the company sold unregistered securities. The case stems from users' claims that the exchange facilitated transactions involving securities without registering them with the Securities and Exchange Commission (SEC).