It was only a matter of time until regulators caught up with cryptocurrency ICOs. These coin offerings have gone unregulated for quite some time now, while raising millions in funding. Anyone buying into these token sales in the US is – according to the law – buying securities, which require special licenses from the company holding the ICO. With US regulators aiming to venture into the cryptocurrency ICO world, things could get quite interesting moving forward.
US Regulators and Cryptocurrency ICOs Won’t Mix Well
Various aspects of cryptocurrency will never be subject to traditional regulation. Virtually all of these projects are decentralized, with no single entity responsible for issuing the coins or controlling the majority of funds circulating on the network. The only entity regulators can go after are the third-party service providers found within the world of cryptocurrency. Wallet providers, exchanges, and investment schemes are bound to see more attention from US regulators moving forward.
Which brings us to cryptocurrency ICOs, the modern-day crowdfunding efforts without regulation or oversight. Everyone in the cryptocurrency world knows how ICOs are growing in popularity and seemingly raise more money than ever before. Projects raising over US$10m in funding are slowly becoming the norm rather than an exception right now. However, there are a lot of legal questions regarding the ICOs and how the tokens are distributed.
It is believed the SEC is currently taking a very close look at any cryptocurrency ICO on the agenda. This does not bode well for most of the projects out there, as very few of these teams have someone with the necessary legal knowledge on board. It is only normal US regulators want to pay close attention to what is going on in this regard, as ICOs can be seen as a way to launder money, in their opinion. A group of people raising millions of dollars overnight without regulation or oversight is suspicious, regardless of how you want to look at it.
The bigger question on people’s mind is whether or not they buy tokens or securities. According to the US legislation, a cryptocurrency token can quickly turn into a security, which causes all kinds of legal issues. If a security is created – voluntarily or by accident – it needs to be overseen and regulated by the SEC, regardless of its ties with cryptocurrency or otherwise. This confusion needs to be avoided at all costs, but for now, there are no clear regulatory guidelines whatsoever.
Rest assured it will not take all that long until the SEC will introduce some form of cryptocurrency ICO regulation moving forward. For now, it remains anybody’s guess as to what we can expect from such a decision. If ICOs are put on the same level as IPOs, things will look very dire for cryptocurrency companies looking at this mechanism as a way to quickly secure funding. Although the SEC is apparently investigating this matter, it may take years until they come to a conclusion.
Moreover, there is the topic of trading these ICO tokens across cryptocurrency exchanges. A lot of tokens can be traded against fiat currencies, which can pose some new challenges as well once regulation materializes. For the time being, the cryptocurrency ICO sector has nothing to worry about just yet. However, this situation could change at any given moment, and a lot of teams will find themselves in an awkward position because of it.
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Can’t have the plebes competing with the accredited investors. Wouldn’t want Joe Six Pack to make some ‘bad investments’ now would we?
Fuck the SEC and their stupid laws. These people have gone completely insane.
This is the most sane comment I’ve seen in a long time. These laws, rules and regulations are in place for only one reason; to protect the credit banking monopoly.
The SEC already prevents us from buying into foreign ICOs, which comprise the majority of ICOs, although if you’re creative, you can make yourself appear to be a foreign buyer and get in anyway.
So many of your paragraphs contain directly contradictory statements…”For the time being, the cryptocurrency ICO sector has nothing to worry about just yet. However, this situation could change at any given moment”….what’s the point of publishing this gar-bage? Is this influential writing? Thought leadership?
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Just about 30 years ago I learned just how controlled we Americans are by bureaucracies ranging from USDA, (I was a farmer/rancher and Professional Engineer) to Wall St. to IRS to yes, SEC. I worked in every foreign $h!th01e from India to Nicaragua trying to support commodities that Wall Street and the Chicago Mercantile controlled as brokers, namely my corn/wheat/cattle, etc.,. It was really tough building a ranch.
I decided to sell out in the US and go to Chile in South America where I discovered everyone else in the world is free and we are not. In Latin America, citizens may travel freely with their national I.D.’s, no passport necessary. I cannot, I have to have a passport and for entry to Brasil, a visa.
We cannot open a trading account in say, Hong Kong then purchase NYSE stocks.
We Americans may not open a trading account in Chile to trade US securities.
Where I sit, we Americans are the most controlled people on earth.
After obtaining residency in Chile, I started a corporation then decided to do everything through the corporation.
I am not totally out from under the umbrella of the “protection” of the SEC, IRS, etc., but I can breathe AND purchase foreign ICO’s.
When you live in Chile, they are all foreign ICO’s!
Do not be afraid to relocate, you may find it refreshingly rewarding.
How funny, every internet freedom legislation contributes to censorship and our “protectors, i.e, elected representatives” allow the bureaucracies to make policy that should be legislation.
We have way too many bosses(owners) and they all are blood suckers.
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