An incredible display of pragmatism from our regulators. Given the commentary on HN it seems that most here want everyone involved in an ICO to be thrown in jail. ICO’s are an effective way to raise funds from a global pool of enthusiasts. The Ethereum blockchain itself was funded from an ICO, and it’s doubtful that as much money would have been raised at such advantageous terms from traditional VC for a 22 year old kid like Vitalik. Very, very good news.
Statement on Cryptocurrencies and Initial Coin Offerings
11–20 of 176 posts
Re: Statement on Cryptocurrencies and Initial Coin Offerings
#12> I believe that initial coin offerings – whether they represent offerings of securities or not – can be effective ways for entrepreneurs and others to raise funding, including for innovative projects. > We at the SEC are committed to promoting capital formation. The technology on which cryptocurrencies and ICOs are based may prove to be disruptive, transformative and efficiency enhancing. I am confident that develop…
I think that is a very considered and wide ranging statement. The proof is in the pudding though. He looks like he has called out some ICO's, but until enforcement proceedings start, it is still not clear. I can't see how any pre-mined ICO, like ripple, wouldn't be treated like a security given those statements.
As a long time crypto investor, even i recognise that ico's are out of control. It is my opinion that if you can't mine it yourself, or get someone independent from the issuer to do it for you, it's a security in everything but name. Any presale token is simply a security towards the coins once released. I can't see how that isn't a security.
Re: Statement on Cryptocurrencies and Initial Coin Offerings
#13An incredible display of pragmatism from our regulators. Given the commentary on HN it seems that most here want everyone involved in an ICO to be thrown in jail. ICO’s are an effective way to raise funds from a global pool of enthusiasts. The Ethereum blockchain itself was funded from an ICO, and it’s doubtful that as much money would have been raised at such advantageous terms from traditional VC for a 22 year old…
He was 19 around the time when Ethereum was raising money.
Re: Statement on Cryptocurrencies and Initial Coin Offerings
#14"In contrast, many token offerings appear to have gone beyond this construct and are more analogous to interests in a yet-to-be-built publishing house with the authors, books and distribution networks all to come."
I am impressed with this SEC statement.
The problem right now is with ICOs that sell tokens for something that doesn't already exist yet, as well as promise returns.
Selling a token for something that doesn't exist yet is clearly a security. Whereas selling a token that already exists, and doesn't need any additional things to be built, is probably not a security.
I am glad that the SEC seems to be getting things right.
Re: Statement on Cryptocurrencies and Initial Coin Offerings
#15> I believe that initial coin offerings – whether they represent offerings of securities or not – can be effective ways for entrepreneurs and others to raise funding, including for innovative projects. > We at the SEC are committed to promoting capital formation. The technology on which cryptocurrencies and ICOs are based may prove to be disruptive, transformative and efficiency enhancing. I am confident that develop…
Important second line to that quote:
"A change in the structure of a securities offering does not change the fundamental point that when a security is being offered, our securities laws must be followed"
They're saying it's fantastic, just do it legally. And for any offering that passes the Howey Test, that means registering with the SEC.
Re: Statement on Cryptocurrencies and Initial Coin Offerings
#16> Sample Questions for Investors Considering a Cryptocurrency or ICO Investment Opportunity
What a great move by the SEC. I think Ethereum, as a vehicle for many/most ICOs, owes it to the community to embrace this list and create a standard disclosure form that encourages new ICOs to answer these. And if Ethereum offers an index of tokens somewhere (I'm not familiar w/Ethereum's details), it could indicate which ones answered some/all of the questions in the form.
BTW industry/trade groups is how lots of businesses avoid regulation. Entertainment industry especially; e.g. ratings and content guidelines from MPAA/ESRB/Comic Code.
Re: Statement on Cryptocurrencies and Initial Coin Offerings
#17A little emphasis, focusing on the aftermath from the SEC's July report on the DAO: > "Following the issuance of the 21(a) Report, certain market professionals have attempted to highlight utility characteristics of their proposed initial coin offerings in an effort to claim that their proposed tokens or coins are not securities. Many of these assertions appear to elevate form over substance. Merely calling a token a…
He even flat out says that most of the ICOs he's seen should be considered securities:
> By and large, the structures of initial coin offerings that I have seen promoted involve the offer and sale of securities and directly implicate the securities registration requirements and other investor protection provisions of our federal securities laws. Generally speaking, these laws provide that investors deserve to know what they are investing in and the relevant risks involved. I have asked the SEC’s Division of Enforcement to continue to police this area vigorously and recommend enforcement actions against those that conduct initial coin offerings in violation of the federal securities laws.
I think some of the other commenters are glossing over that statement and being rather over-optimistic about the SEC's stance toward tolerating ICOs.
Re: Statement on Cryptocurrencies and Initial Coin Offerings
#18Jay Clayton '1] This statement is my own and does not reflect the views of any other Commissioner or the Commission. This statement is not, and should not be taken as, a definitive discussion of applicable law, all the relevant risks with respect to these products, or a statement of my position on any particular product. ' Intriguing that this is a personal perspective....
It isn't yet practical for the SEC to regulate crypto formally because the industry is still in its early stages and evolving rapidly. The SEC needs to balance many interests, and it's not clear what the costs and benefits will be.
Re: Statement on Cryptocurrencies and Initial Coin Offerings
#19This is not a statement from the SEC, but from chairman Clayton. See footnote [1]: « This statement is my own and does not reflect the views of any other Commissioner or the Commission. This statement is not, and should not be taken as, a definitive discussion of applicable law, all the relevant risks with respect to these products, or a statement of my position on any particular product. »
ya it might be prudent to tweak the title
Re: Statement on Cryptocurrencies and Initial Coin Offerings
#20> I believe that initial coin offerings – whether they represent offerings of securities or not – can be effective ways for entrepreneurs and others to raise funding, including for innovative projects. > We at the SEC are committed to promoting capital formation. The technology on which cryptocurrencies and ICOs are based may prove to be disruptive, transformative and efficiency enhancing. I am confident that develop…
Important second line to that quote: "A change in the structure of a securities offering does not change the fundamental point that when a security is being offered, our securities laws must be followed" They're saying it's fantastic, just do it legally. And for any offering that passes the Howey Test, that means registering with the SEC.
and probably requiring Accredited Investors only at some point, which probably 90 percent of crypto folks aren't, myself included.
Accredited investors must make 200 to 300k annual (dual income allowed) and/or have 5 mill in tied up assets and/or a net worth of over 1 mill.