[2018-11-16] Statement on Digital Asset Securities Issuance and Trading

alani123

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Quote from: vader18 on November 19, 2018, 06:30:20 AM

Wow. Many seem happy about this development. Correct me, if I’m wrong, but this seems very good for ico coins, but very bad for investors. I mean , the coins/businesses can just pay a 250k fine, agree to be labeled a “security” and then get back to work. But it seems to me the US investor isn’t going to be invited to the party. Once they coin company lists as a security. They will need to refund investors. The investors will never be able to trade their coins, rendering their coins worthless.

I don't see requiring securities registration as a good development for either side.

For one, the entry barrier is now bigger for ICOs to start. This is a so so situation. Perhaps fewer scam projects would take the risk. But in reality, I think they'll just move to a different territory and work with non-US based teams.

As of investors of older ICOs, most would be happy to get a refund provided that ICOs wend through a slump. But good luck following legal battles with your money in limbo...
New projects might bar US investors from officially purchasing their tokens altogether due to this regulation. Not that this wasn't already happening.

vader18

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Wow. Many seem happy about this development. Correct me, if I’m wrong, but this seems very good for ico coins, but very bad for investors. I mean , the coins/businesses can just pay a 250k fine, agree to be labeled a “security” and then get back to work. But it seems to me the US investor isn’t going to be invited to the party. Once they coin company lists as a security. They will need to refund investors. The investors will never be able to trade their coins, rendering their coins worthless.

alani123

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Quote from: buwaytress on November 18, 2018, 10:23:59 AM

Quote from: alani123 on November 18, 2018, 09:32:04 AM

It appears as though the SEC has ordered two ICOs to compensate investors! Will this lead to a snowball effect calling for lawsuits against ICOs?
I predict that there will be no more ICOs establishing a legal base in the US, officially accepting US investors or even having US based citizens in high ranks of their team... This had already been happening to some extent.

I'm not sure what to make of it. From what the reading's been piling up on over the past few months, there seems to be really high confidence in these so-called digitalized securities (or let's say STOs that's being marketed now) getting their first approvals by the SEC, looking at the recent musings on Reg A+ style IPOs and SEC Form D filings. They seem highly confident they can get digital securities compliant on fast track.

There's that quote from article above though: "regardless of whether the securities are issued in certificated form or using new technologies", which does seem to imply the SEC might view them differently. No point speculating though, since I don't really see any proper implications on Bitcoin itself.

Yeah, well, bitcoin's network might remain unaffected but this is more about the playing field for investors and the crypto market. Ethereum and ICOs acted as a massive entry point for cash to enter crypto. This has a positive impact on bitcoin as well.

In terms of compliance, I'm for good regulation to ICOs and I'm confident that it would help ICOs see some legitimization in the US even among more traditional investors. But it's going to be a slow moving process and would increase the entry barrier both in terms of costs and bureaucracy for anyone to do a compliant ICO.

My main concern is for ICOs that were run prior to this development. They might run into serious implications. Lawyers in the US are sue-happy and if they have case-law on their side it could create a large debacle.

Here's a twitter thread about this development that I found interesting:
https://twitter.com/TuurDemeester/status/1063525156969218049

buwaytress

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Quote from: alani123 on November 18, 2018, 09:32:04 AM

It appears as though the SEC has ordered two ICOs to compensate investors! Will this lead to a snowball effect calling for lawsuits against ICOs?
I predict that there will be no more ICOs establishing a legal base in the US, officially accepting US investors or even having US based citizens in high ranks of their team... This had already been happening to some extent.

I'm not sure what to make of it. From what the reading's been piling up on over the past few months, there seems to be really high confidence in these so-called digitalized securities (or let's say STOs that's being marketed now) getting their first approvals by the SEC, looking at the recent musings on Reg A+ style IPOs and SEC Form D filings. They seem highly confident they can get digital securities compliant on fast track.

There's that quote from article above though: "regardless of whether the securities are issued in certificated form or using new technologies", which does seem to imply the SEC might view them differently. No point speculating though, since I don't really see any proper implications on Bitcoin itself.

alani123

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It appears as though the SEC has ordered two ICOs to compensate investors! Will this lead to a snowball effect calling for lawsuits against ICOs?
I predict that there will be no more ICOs establishing a legal base in the US, officially accepting US investors or even having US based citizens in high ranks of their team... This had already been happening to some extent.

alani123

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Quote

In recent years, we have seen significant advances in technologies – including blockchain and other distributed ledger technologies – that impact our securities markets. This statement[1] highlights several recent Commission enforcement actions involving the intersection of long-standing applications of our federal securities laws and new technologies.

The Commission's Divisions of Corporation Finance, Investment Management, and Trading and Markets (the "Divisions") encourage technological innovations that benefit investors and our capital markets, and we have been consulting with market participants regarding issues presented by new technologies.[2] We wish to emphasize, however, that market participants must still adhere to our well-established and well-functioning federal securities law framework when dealing with technological innovations, regardless of whether the securities are issued in certificated form or using new technologies, such as blockchain.

[1] This statement represents the views of the Divisions of Corporation Finance, Investment Management, and Trading and Markets. It is not a rule, regulation, or statement of the Securities and Exchange Commission (“Commission”). The Commission has neither approved nor disapproved its content.

[2] The Chairman of the Commission and the Director of the Division of Corporation Finance have also provided public statements on this subject. See, e.g., Statement on Cryptocurrencies and Initial Coin Offerings (Dec. 11, 2017), available at https://www.sec.gov/news/public-statement/statement-clayton-2017-12-11; Digital Asset Transactions: When Howey Met Gary (Plastic) (June 14, 2018), available at https://www.sec.gov/news/speech/speech-hinman-061418.

Topic: [2018-11-16] Statement on Digital Asset Securities Issuance and Trading (Read 134 times)