A federal judge has ruled that U.S. securities laws may cover an initial coin offering (ICO), handing the government a legal victory in its effort to regulate billions of dollars in cybercurrency offerings much like stocks.

The ruling came in a criminal case against a man charged with promoting digital currencies backed by investments in real estate and diamonds that prosecutors said didn't exist. U.S. District Judge Raymond Dearie in Brooklyn, New York, said on Tuesday that the government can proceed with a case alleging that an initial coin offering is a security for purposes of federal criminal law.

About $18.7 billion has been raised this year by so-called ICOs, according to data compiled by Coinschedule.com. Securities and Exchange Commission (SEC) Chairman Jay Clayton has said the fundraising method should be regulated, adding that he believes the market has become rife with fraud as it has quickly expanded with the popularity of digital currencies and blockchains.