It's so obvious what happened here, all on the blockchain for the world to see. At least this is one benefit of the blockchain is it makes it easier to detect insider trading.
Meanwhile, 27 more crypto crashes/scams/thefts/rug pulls just this month.[3]
[1] https://www.skadden.com/insights/publications/2022/07/crypto...
[2] https://www.sec.gov/spotlight/cybersecurity-enforcement-acti...
> The American supermarket chain and cookie butter paradise, Trader Joe's, has filed a lawsuit against the popular Trader Joe decentralized exchange. According to the lawsuit, the supermarket believes the exchange is trying to benefit off the supermarket's popularity.
> This is actually the second such lawsuit by the supermarket against the exchange, after the first was thrown out when defendants claimed that they had simply named the project after the co-founder's brother, Joe. However, shortly after the victory, a co-founder admitted on their blog that they "just named it Trader Joe, after the supermarket".
> Trader Joe's is seeking all profits made by the exchange, plus damages and compensation for the failed lawsuit last year.
Why not a licensing fee with retroactive pricing?
I doubt the supermarket wants to be affiliated with a crypto exchange.
Because their goal is to get the exchange to stop using their name. Charging a licensing fee would be the opposite of that.
EDIT: Done.
Even if they aren't securities, a rug-pull of any medium of exchange ("reddit bucks") would fall under wire fraud. https://www.justice.gov/archives/jm/criminal-resource-manual...
> the four essential elements of the crime of wire fraud are: (1) that the defendant voluntarily and intentionally devised or participated in a scheme to defraud another out of money; (2) that the defendant did so with the intent to defraud; (3) that it was reasonably foreseeable that interstate wire communications would be used; and (4) that interstate wire communications were in fact used
The moment the seller knows that the tokens they are selling have taken a big hit to their value, they are engaging in parts 1 and 2 above when they attempt to sell the tokens to those ignorant of this hit in value. Parts 3 and 4 are guaranteed with internet architecture.
If this doesn't fall under the SEC's authority, they can easily send it on to the FBI.