The U.S. government is pushing back against an effort to dismiss the charges it filed in an ongoing initial coin offering (ICO) fraud lawsuit.

In twin filings submitted Monday, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) dismissed claims by defendant Maksim Zaslavskiy that U.S. securities laws don't apply to the sale of tokens tied to two ventures, one backed by real estate and the other by diamond holdings.

Zaslavskiy – who has pled not guilty to securities fraud – was first charged by the SEC last September, followed by additional charges sought by the Justice Department in November. The SEC case against Zaslavskiy has been put on hold pending the outcome of DOJ's suit.

The filings are notable given the growing footprint of the U.S. government – and the SEC in particular – in the cryptocurrency space. The SEC has adopted an increasingly active approach since it first publicly declared that tokens issued in conjunction with The DAO, the now-defunct ethereum-based funding vehicle, were securities.

And just last week, a senior official with the SEC's Enforcement Division disclosed during an event appearance that the agency is conducting "dozens" of investigations in this area.

At the heart of Zaslavskiy's push to dismiss the charges is the argument that the two tokens in question aren't actually securities under U.S. law, which he argued is too vague, and are currencies instead. Prosecutors pushed back against this claim, stating that the both the RECoin and Diamond token fall squarely within the boundaries of the Howey Test.

"Now facing prosecution for securities fraud, the defendant claims that his 'investment opportunity' was no investment at all—it was just a sale of a currency backed by a commodity, first real estate (REcoin) and then diamonds (Diamond)," the U.S. government's lawyers wrote. "The currency, according to the defendant, are the worthless certificates sent to investors that prompted some to ask for refunds."

They went on to argue:

The Department of Justice's filing strikes a decidedly dismissive tone toward the argument that SEC regulations aren't clear enough when it comes to the question of cryptocurrencies and ICOs.

Indeed, both of the filings are accompanied by copies of some of the statements issued in recent months by the U.S. securities regulator

"The defendant invites this Court to be the first to declare the Securities Acts unconstitutionally vague (either facially or as-applied)," the DOJ's filing quipped.

Notably, the government argued that Zaslavskiy knew what he was doing when he began soliciting investments for both token sales, writing that he “had more than sufficient notice that this conduct constituted securities fraud.”

"What is more, there is evidence that the defendant was, in fact, on notice that he was subject to the securities laws," the government wrote, going on to add that one investor in the RECoin ICO had asked about compliance and had been told "in sum and substance that the investor had nothing to worry about with respect to legal compliance."

"The SEC also contacted the defendant as early as August 15, 2017 requesting information about the REcoin ICO. The defendant wrote that he planned to hire an attorney, but instead proceeded with the Diamond ICO," the filing continued.

The DOJ and SEC filings can be found below:

Department of Justice by CoinDesk on Scribd

SEC by CoinDesk on Scribd

Justice statue image via Shutterstock