SEC Cracks Down On "Initial Coin Offerings": Concludes Tokens Are Subject To Securities Laws

[Swordsmyth]

In groundbreaking news for the blockchain community, moments ago the SEC issued a press release, referencing an investor bulletin on Initial Coin Offerings, which concluded that DAO Tokens, a Digital Asset, are securities for regulatory purposes, and cautioned that US Securities law "may" apply to offers, sales and trading of interested in virtual organization, targeting the increasingly more popular Initial Coin Offerings.

Capital raising through blockchain requires compliance with federal securities laws https://t.co/IjOxjoVdfK
— SEC Enforcement (@SEC_Enforcement) July 25, 2017

As a result of this change of treatment, those who use ICOs to sell tokens, which as a reminder have now surpassed over $1 billion in net proceeds, will have to register the tokens as securities, those participating in unregistered offerings may be liable for violations of the securities laws, and that the purpose of the registration "is to ensure that investors are sold investments that include all the proper disclosures and are subject to regulatory scrutiny for investors' protection."
In a press release issued on Tuesday afternoon, the SEC said it had issued an investigative report "cautioning market participants that offers and sales of digital assets by "virtual" organizations are subject to the requirements of the federal securities laws." Such offers and sales, conducted by organizations using distributed ledger or blockchain technology, have been referred to, among other things, as "Initial Coin Offerings" or "Token Sales." In its first official regulatory intervention of ICOs, the SEC said that "whether a particular investment transaction involves the offer or sale of a security – regardless of the terminology or technology used – will depend on the facts and circumstances, including the economic realities of the transaction."

More at: http://www.zerohedge.com/news/2017-0...ecurities-laws

[kpitcher]

Not all ICOs are securities, it depends how they are set up and what the coin or token offers.

The DAO had a plan to share profits which would be a security.

Coinbase even has a handy worksheet to help people determine if an ICO is likely to be seen as a security or not
https://www.coinbase.com/legal/secur...-framework.pdf

[kpitcher]

The SEC called someone about to do an ICO...

https://hackernoon.com/the-sec-calle...d-8cbbd31568ec

[GennyViver]

Well, it's finally happened. Seems that now there will be no ICO but will be STO - Security Token Offerings