Developers of a private cryptocurrency called Latium have been named as defendants in a suit in federal court in Newark, New Jersey. on behalf of investors who spent $17 million on its initial offering.

The Latium offering violated federal securities laws by selling unregistered securities, the suit claims. Although the developers depicted the Latium initial coin offering as a sale of “utility-based tokens,” it was subject to the Securities Act of 1933 because investors were promised that the tokens would be worth more than the price they paid, according to the suit.

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