Just kidding, the question of "what is a security" was not addressed.
From CoinTelegraph's Magazine, November 14:
Legal issues surround the FBI’s creation of fake crypto tokens
Novel tokens launched by the FBI and AI agents raise more questions. Our panel of crypto lawyers discusses what’s legal and who bears legal liability.
United States authorities have recently charged 18 individuals with cryptocurrency market manipulation following a Federal Bureau of Investigation (FBI) sting operation, in which law agents created a token to lure market makers into illegal wash trading.
The case has sparked debate on the application of traditional financial laws, such as anti-market manipulation rules, within the cryptocurrency industry. The case also raises potential copyright concerns, with allegations that the FBI may have improperly used open-source code for its token.
Meanwhile, technologies like autonomous AI agents now play roles in controlling crypto wallets, and questions of accountability in crypto transactions and tokens become more complex: Who ultimately bears responsibility?
Magazine spoke with a panel of legal experts to find out more: Digital & Analogue Partners co-founder Catherine Smirnova in Europe, co-chair of the Hong Kong Web3 Association Joshua Chu from Asia, and Rikka Law Managing Partner Charlyn Ho from the United States.
The discussion has been edited for clarity and brevity.
Magazine: The US Justice Department has charged 18 individuals and entities for alleged market manipulation and wash trading. How is wash trading defined legally, and how does it apply to the crypto industry?
Smirnova: The definition [of wash trading] is more or less similar in different markets, whether it’s the US, the United Kingdom or the European Union. It belongs to the financial markets, not only to crypto markets. It involves simultaneous buying and selling transactions of the same security to create misleading market activity or to create the wrong impression that this asset is in high demand.
It is completely illegal in every single legal system, and — surprise, surprise — there is nothing different with crypto assets. This is a market of securities, and yes, white-collar crimes are illegal. They’re still crimes even if the asset is a crypto asset.
Chu: In Hong Kong, there are basically mechanisms that prohibit people from doing market manipulation practices as if it’s a security. We have these provisions under Section 53, set out in the Anti-Money Laundering Ordinance, which allows regulators to penalize people for recklessly promoting or inducing people into purchasing virtual assets. The wording of that law is copied from securities law.
If you know that a certain product is not justifiable to have a certain price, but you’re taking certain actions to drive it up and inducing others to follow that particular purchase, that, in itself, may result in prosecution.
I’ve always been an advocate saying that you don’t need a new set of rules to govern new technologies because existing laws are actually more than adequate in covering most crimes. Fraud will always be fraud, [and] market manipulation will always be market manipulation.
Magazine: The FBI created its own token to lure market manipulators and wash traders in this operation. Public discussions on X allege that they infringed copyright laws by doing so. So, did the FBI violate the MIT License and is it thus subject to copyright infringement?....
....MUCH MORE
"...for most people following the crypto space, Howey is an old frenemy"—"How We Howey", U.S. Securities and Exchange Commission, May 9, 2019
Okay, we blew the dust off of 2017's What Is A Security? The SEC and ICO's, Crypto, the Weaver's Beaver Case and Rule 10B-5
