03 Aug Wall Street regulator sets sights on digital coin offerings
Wall Street’s main regulator said on Tuesday that initial coin offerings (ICOs), a means of crowdfunding for blockchain technology companies, should be subject to the same safeguards required in traditional securities sales.
ICOs have become a bonanza for digital currency entrepreneurs, allowing them to raise millions quickly by creating and selling digital “tokens” with no regulatory oversight.
But the Securities and Exchange Commission (SEC) has said that the tokens can be considered securities, and therefore, may need to be registered unless a valid exemption applies.
“The innovative technology behind these virtual transactions does not exempt securities offerings and trading platforms from the regulatory framework designed to protect investors and the integrity of the markets,” said Stephanie Avakian, the co-director of the SEC’s enforcement division.
The decision reminds blockchain startups that they cannot ignore investor protections, and could make some potentially more cautious about fundraising via coin sales in the United States.
Read more: https://www.reuters.com/article/us-usa-sec-digital-idUSKBN1AA2OL?utm_source=FintechCircle+Master+List&utm_campaign=11a735fdbd-EMAIL_CAMPAIGN_2017_07_22&utm_medium=email&utm_term=0_03f5147ca1-11a735fdbd-522205577&mc_cid=11a735fdbd&mc_eid=9bcccb7fb7