Why Can’t US Citizens Participate in Cryptocurrency ICOs?

Given the recent popularity of cryptocurrency ICOs, it was to be expected some things would be unclear to a lot of people. One of the most recurring questions is why all of these ICOs try to prevent US citizens from participating. There are many different reasons as to why this is the case, even though the countermeasures can be bypassed quite easily.

ICOs and US Citizens Don’t Mix Well

Anyone who has recently participated in a cryptocurrency ICO or pre-ICO may have noticed how these offerings are, in theory not available to residents in the US. Some projects even go as far as trying to dissuade residents from Singapore to participate as well. It is evident these two regions do not take kindly to cryptocurrency ICOs, mainly due to regulatory reasons.

To put this into perspective, the United States is quite strict when it comes to investment regulations. Only accredited investors can partake in private placements of securities. While some people would urge all cryptocurrency ICOs are tokens and not securities, regulators will have a very different opinion regarding this matter. A  lot of the ICOs we have seen can be labeled as traditional sales of equity.

As is to be expected, the team organizing a cryptocurrency ICO cannot guarantee only accredited US investors will partake. They can take the necessary steps to prevent most US citizens from investing, although these measures can be bypassed. Right now, the ICOs tend to ask if you are a US citizen, but there is no verification of whether or not one speaks the truth. Some projects use geolocation to block US citizens, but those can be bypassed with a proxy or VPN. It is impossible to prevent US citizens from participating, but these measures have to be taken regardless.

Some of the bigger cryptocurrency ICOs will ensure they hire lawyers who can create a more “workable” environment for interested parties. If they would not take these steps, their entire token sale would be liable to criminal charges in the US. That is, assuming the SEC would ever decide to investigate a particular crowdsale for those specific reasons. It is highly unlikely that will happen, even though the SEC is looking to regulate ICOs moving forward.

Once the SEC will effectively intervene in cryptocurrency ICOs – which is only a matter of time – things will get very interesting, to say the least. A lot of previous ICOs didn’t take the necessary steps to “deny” US citizens from investing. All of those projects and their teams are at the mercy of the SEC for the time being. Violating US securities laws is not something anyone wants to deal with. Additionally, these laws can also be enforced upon non-US companies, which makes it even more important to take countermeasures.

It is evident this unregulated space will be of keen interest to financial watchdogs all over the world in the coming years. The bigger question is how many companies will get burnt for not doing their due diligence. It is bad enough to know most of these projects may ultimately fail. Worrying about future criminal charges will certainly have a big impact on all of these crowdsales moving forward.

If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.

91 Comments

  1. Swissborg June 29, 2017
  2. Devin Serpa June 29, 2017
  3. Stephen Jones June 30, 2017
  4. Sgt. Grimsley USMC July 2, 2017
  5. Alexei Gudkov July 3, 2017
  6. Alexei Gudkov July 3, 2017
  7. Stephen Jones July 3, 2017
  8. Karl B. Hensel July 5, 2017
  9. kostas123 July 15, 2017
  10. Carol King July 24, 2017
  11. Weekdaygirl August 11, 2017
  12. Hannibal Smith August 25, 2017
  13. Hannibal Smith August 25, 2017
  14. Maury McCoy October 18, 2017
  15. Hannibal Smith October 19, 2017
  16. Karl B. Hensel October 19, 2017
  17. Ahmed Samir October 26, 2017
  18. Briana L October 31, 2017
  19. Hannibal Smith November 3, 2017
  20. wc sniperkenels November 10, 2017
  21. James Rudy November 18, 2017
  22. Alease Forde November 20, 2017
  23. cheap flights January 31, 2021
  24. cheap flights January 31, 2021
  25. cheap flights February 1, 2021
  26. tinyurl.com February 2, 2021
  27. cheap flights February 2, 2021
  28. http://tinyurl.com/ February 3, 2021
  29. JbnbInasy February 3, 2021
  30. Aqcfshedgeled February 4, 2021
  31. Lbsxpseub February 5, 2021
  32. Ahkdpseub February 6, 2021
  33. Fqhhpseub February 6, 2021
  34. frolep rotrem February 6, 2021
  35. Fvfctrabe February 6, 2021
  36. Jbbvpseub February 7, 2021
  37. zortilonrel February 7, 2021
  38. Kbcxbusy February 8, 2021
  39. Fókuszpályázat February 9, 2021
  40. Nncstrabe February 9, 2021
  41. personal budgeting coach February 9, 2021
  42. redraw to vector February 10, 2021
  43. JbnvInasy February 10, 2021
  44. rateio de concurso February 10, 2021
  45. Slot February 10, 2021
  46. brujos gratis en linea February 11, 2021
  47. tadalafil 60 mg for sale February 11, 2021
  48. plaquenil drug February 11, 2021
  49. zithromax antibiotics February 11, 2021
  50. tinyurl.com February 11, 2021
  51. http://180.210.204.54/ February 11, 2021
  52. Labxpseub February 12, 2021
  53. scrapbook aguas claras February 13, 2021
  54. comprar grama belo horizonte February 13, 2021
  55. Ahbzpseub February 13, 2021
  56. Fqbbpseub February 13, 2021
  57. Marketing Digital February 14, 2021
  58. Auto detailing bangor me February 14, 2021
  59. Judi Slot Online February 14, 2021
  60. Jbbnpseub February 15, 2021
  61. gym shop February 15, 2021
  62. Kvaxbusy February 15, 2021
  63. go to my blog February 16, 2021
  64. Hot Tub Cover February 16, 2021
  65. Relationship Counselling February 17, 2021
  66. solar company malaysia February 17, 2021
  67. DonaldGoode February 17, 2021
  68. filmes online hd February 18, 2021
  69. Names for Free Fire February 18, 2021
  70. sambucol black elderberry February 18, 2021
  71. Noticias de Animes February 18, 2021
  72. foto digital February 19, 2021
  73. How to make money from amazon February 19, 2021
  74. Miki Cratty February 21, 2021
  75. kreuzfahrten February 21, 2021
  76. Seguro de carro barato February 21, 2021
  77. agendas February 21, 2021
  78. Agen pkv online February 22, 2021
  79. der reisen February 22, 2021
  80. aaii investor sentiment February 23, 2021
  81. hovercraft uk February 23, 2021
  82. special info February 23, 2021
  83. 90 Hitz Music February 23, 2021
  84. arab chat February 24, 2021
  85. el brujo costa rica February 24, 2021
  86. DevOps February 24, 2021

Leave a Reply