Law firm Quinn Emanuel calls TSSB’s latest allegations “meritless”
NEW YORK, April 3, 2025 /PRNewswire/ — Digital asset technology developer The Apertum Foundation and Josip Heit have hired Quinn Emanuel Urquhart & Sullivan, LLP to defend against an unlawful cease-and-desist order issued by the Texas State Securities Board (TSSB).
After Mr. Heit and other respondents entered into a settlement agreement with forty-three U.S. and Canadian securities regulators in a related matter, Quinn Emanuel alleges the TSSB violated the terms of the settlement and abandoned it without adequate notice and on contrived grounds. The settlement remains on track with the other forty-two jurisdictions.
Shortly after the TSSB’s alleged violation of the settlement terms, it issued a new cease-and-desist order, alleging that the Apertum token (APTM) is an unregistered security. The Apertum Foundation and Mr. Heit have challenged the order as an abuse of the TSSB’s jurisdiction.
“APTM is a utility token, not an investment contract,” said Avi Perry, co-Chair of the Securities Litigation Group at Quinn Emanuel. “Neither the SEC nor any court would classify APTM as a security. In fact, the TSSB’s order itself acknowledges that APTM is only deployed through mining, and the SEC recently clarified that crypto mining does not involve the offer and sale of securities. The TSSB’s accusations are entirely incorrect: APTM isn’t a security, and our clients didn’t offer it for sale in Texas.”
Neither The Apertum Foundation nor Mr. Heit offers APTM for sale anywhere. APTM can either be mined, or it can be purchased and sold on third-party crypto exchanges. The only way to mine APTM is to buy a mining bot through the DAO1 platform, and the TSSB’s order concedes that DAO1’s mining bot is not being offered for sale in Texas. To the extent APTM is tradeable on third-party exchanges, those secondary market transactions have been held by courts not to constitute securities sales.
The DAO1 platform clearly prohibits U.S. residents from accessing the platform and uses geo-blocking to block U.S. IP addresses, precisely because it is not marketing to U.S. residents (including Texans). Nor can users who provide U.S. Know Your Customer (KYC) documentation deposit funds or otherwise transact on the platform. The United States does not even appear in the dropdown list of available countries during the DAO1 registration process.
“The TSSB’s order raises serious questions about why the Texas State Securities Board is using limited taxpayer funds to target a compliant non-U.S. crypto project that is neither a security nor in Texas,” said Mr. Perry of Quinn Emanuel. “The TSSB’s decision to go after a single utility token that is not marketed to U.S. residents is a waste of resources, inconsistent with precedent, and completely out of sync with prevailing understandings of how U.S. securities laws apply to digital assets. Our clients will defend themselves vigorously.”
Quinn Emanuel Urquhart & Sullivan, LLP is a 1000+ lawyer business litigation firm—the largest in the world devoted solely to business litigation and arbitration with 34 global office locations. Surveys of major companies around the world have named it the “most feared” law firm in the world three times. Firm lawyers have tried over 2,500 cases, winning 86% of them. When representing defendants, Quinn Emanuel’s trial experience gets better settlements or defense verdicts. When representing plaintiffs, Quinn Emanuel lawyers have won nearly $80 billion in judgments and settlements. Quinn Emanuel has also obtained seven nine-figure jury verdicts, four 10-figure jury verdicts, 51 nine-figure settlements, and 20 10-figure settlements.
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