The US securities and exchange Commission Security and Exchange Commission (SEC) Reportedly against a number of Initial Coin Offerings (ICOs). Particular attention should be paid to the question of whether ICOs is legally considered securities, and therefore the special protection of investors is subject to.
The SEC seems to be the hardness of bandages. How to Decrypt Media reports, since the beginning of the year, a variety of ICOs in the crosshairs of the SEC investigation. A number of companies would receive a formal summons. According to the report, have experienced the company of the investigation process by the subpoenas.
Legally, the question, to which investors, the tokens were sold. Because ICOs are allowed to invest, provided that these are a value paper, only the so-called “Accredited Investors”. Only if it is ensured that all the Token-buyer meet this formal Definition, it is allowed to operate the businesses without SEC approval. Under the “Accredited Investor” understands the law – simplified investor words – large.
Here is the core of the problem is: In the case of the company against which the SEC determined, within the meaning of KYC is not sufficiently tested. This rule will apply but only if ICOs are finally defined as securities. At this point, the interpretation of the law between the company and the SEC apart, however.
SEC: ICOs, without question, securities
For the SEC, that ICOs will need to apply in almost all cases, as the value of paper. During a Senate hearing, Jay Clayton, Chairman of the SEC, expressed as follows:
“I think every ICO that I know of is a value of paper.”
This argument the company made soft again with the semantics. To apply instead of the Token Sale as an ICO, the company “Utility Token” for sale. In order to avoid classification as ICO. Since “Utility Token”, apart from the naming, to distinguish from ICOs, you will not see this Dodge, however, very convincing.
According to reports, could be achieved in many cases, an out-of-court settlement. The incriminated Start-ups with the authority, agreed to a refund of the collected Funding to the investors.
The right way of dealing with ICOs
The ICO Hype from last year is still high waves. As an Alternative to traditional Venture Capital Funding, ICOs are, on the one hand, a low-threshold funds for the procurement of capital. On the other hand, the lack of regulation of scams the door open. It is not therefore surprising to observe that, according to a study, 80 percent of all ICOs.
A balanced regulation is therefore urgently needed. However, it remains to be seen whether the US securities and exchange Commission for reasonable investors can provide protection without making It completely off.