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SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

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Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#11

Post by m777z »

I'm not terribly happy with the decision, though I can't say I'm surprised. I enjoy the drama of the Wild West that is Ethereum and the rest of the cryptocurrency ecosystem. Minimal regulation encourages innovation, while regulated markets can exist for people who want stability and certain guarantees to prevent fraud (or at least make it difficult).

I wonder what would happen if financial regulations became more "optional". I.e. the SEC exists to provide guarantees if a given company wanted to get the SEC's seal of approval but does not enforce most regulations on entities that don't seek SEC approval (and thus investors would know such entities are riskier). I suppose eventually a "too big to fail" company would avoid regulation and consequently go under, and that would be the end of that.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#13

Post by Cshelton »

kensai wrote: post #7

Look at the beating the market gets right now (as of 13 minutes after the news were posted). https://coinmarketcap.com

To be fair, the market was down around that much today already. The SEC article has had little to no effect as of yet.

I also don't see it having much effect at all as all of those tokens are traded in secondary markets.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#14

Post by brucephillips »

robbiet480 wrote: post #4

This appears to only applies to ICOs that offer something that is like a security, such as the DAO, not voucher based ICOs like Primalbase or Storj EDIT: Added appears to since IANAL

It does seem to be ambiguous. If you read the qualifications in section III: https://www.sec.gov/litigation/investreport/34-81207.pdf, they seem to apply to voucher tokens as well. Especially "A reasonable expectation of profit".

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#15

Post by brucephillips »

smokeyj wrote: post #10
joeyspn wrote: post #2

BOOM! the game just changed... > In light of the facts and circumstances, the agency has decided not to bring charges in this instance, or make findings of violations in the Report, but rather to caution the industry and market participants: the federal securities laws apply to those who offer and sell securities in the United States, regardless whether the issuing entity is a traditional company or a decentralized a…

This literally changes nothing. Regulated companies already knew what the findings would be. Unregulated companies still don't care.

What is an "unregulated company"?

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#16

Post by DennisP »

m777z wrote: post #11

I'm not terribly happy with the decision, though I can't say I'm surprised. I enjoy the drama of the Wild West that is Ethereum and the rest of the cryptocurrency ecosystem. Minimal regulation encourages innovation, while regulated markets can exist for people who want stability and certain guarantees to prevent fraud (or at least make it difficult). I wonder what would happen if financial regulations became more "op…

It might not change the overall ecosystem that much. Many companies doing ICOs are already locating themselves in friendlier jurisdictions, and making some effort to block U.S. contributors.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#17

Post by Cshelton »

m777z wrote: post #11

I'm not terribly happy with the decision, though I can't say I'm surprised. I enjoy the drama of the Wild West that is Ethereum and the rest of the cryptocurrency ecosystem. Minimal regulation encourages innovation, while regulated markets can exist for people who want stability and certain guarantees to prevent fraud (or at least make it difficult). I wonder what would happen if financial regulations became more "op…

The regulations put in place by the SEC are not to help companies, but to protect U.S. citizens from being scammed all the time.

Sure, the wild west is fun, but if you are in an economic ecosystem where a large percentage is comprised of scammers/fraudulent companies, then it will be detrimental to long term success.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#18

Post by empath75 »

brucephillips wrote: post #15
smokeyj wrote: post #10

Earlier quoted context omitted.

This literally changes nothing. Regulated companies already knew what the findings would be. Unregulated companies still don't care.

What is an "unregulated company"?

Criminal enterprises.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#19

Post by binarymax »

smokeyj wrote: post #10
joeyspn wrote: post #2

BOOM! the game just changed... > In light of the facts and circumstances, the agency has decided not to bring charges in this instance, or make findings of violations in the Report, but rather to caution the industry and market participants: the federal securities laws apply to those who offer and sell securities in the United States, regardless whether the issuing entity is a traditional company or a decentralized a…

This literally changes nothing. Regulated companies already knew what the findings would be. Unregulated companies still don't care.

This changes lots of things. You can't just open an DAO/ETH/BTC exchange, you need to be compliant with securities law and regulation. Those who operate as an exchange now but do not file the proper paperwork (which is expensive) should expect audits, fines, and shutdown.
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