SEC: ICOs Can be Securities Offerings and Need to be Registered

SEC: ICOs Can be Securities Offerings and Need to be Registered 1

Late last week, the SEC released a statement informing the crypto and investor communities that it had settled with two ICOs that had carried out unregistered securities offering. The two firms that were cited by the SEC were CarrierEQ Inc. (Airfox) and Paragon Coin Inc. The settlement included the following actions:

  • Each ICO was fined $250,000
  • Each was ordered to compensate harmed investors who purchased tokens in the illegal offerings
  • Both firms agreed to register their tokens according to the Securities Exchange Act of 1934
  • They were also to file periodic reports with the Commission for at least a year

SEC’s Statement on Digital Asset Securities Issuance and Trading

Right after the settlement with the two ICOs, the SEC went ahead and issued another statement from its Division of Corporation Finance, Division of Investment Management, and Division of Trading and Markets.

ADVERTISEMENT

The second statement made it clear that the SEC was okay with emerging technologies such as blockchain and distributed ledgers. The Commission went ahead to even encourage such innovations as can be seen from the following excerpt that also informs market participants (ICOs) to adhere to existing laws:

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.

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.

ICOs Can Be Securities Offerings

The SEC had earlier on issued guidelines on ICOs back in late August. The ICO guidelines on the Commission’s website clearly states that based on specific facts, some ICOs fall under securities offerings and need to be registered accordingly.

The Commission also advises would-be-investors of such opportunities, to always carry out their due diligence. Such in depth analysis of the opportunity at hand allows the investor to find out if the ICO being presented, falls under the category of a Securities Offering.

SEC Warns About the Risks Involved

The SEC also has warned about fraud as can be seen in the following statement.

While some ICOs may be attempts at honest investment opportunities, many may be frauds, separating you from your hard-earned money with promises of guaranteed returns and future fortunes.

They may also present substantial risks for loss or manipulation, including through hacking, with little recourse for victims after-the-fact.

Existing Securities Laws Apply to ICOs

Summing it up, the SEC clearly stated that existing laws do cover Initial Coin Offerings. As earlier stated, some of these laws date back to 1934.

ADVERTISEMENT

What are your thoughts on the SEC finally providing clarity on ICOs? Please let us know in the comment section below. 

Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.

About the author

E-Crypto News was developed to assist all cryptocurrency investors in developing profitable cryptocurrency portfolios through the provision of timely and much-needed information. Investments in cryptocurrency require a level of detail, sensitivity, and accuracy that isn’t required in any other market and as such, we’ve developed our databases to help fill in information gaps.

Related Posts

E-Crypto News Executive Interviews



bitcoin
Bitcoin (BTC) $ 61,733.00
ethereum
Ethereum (ETH) $ 3,861.51
binance-coin
Binance Coin (BNB) $ 471.67
tether
Tether (USDT) $ 1.00
cardano
Cardano (ADA) $ 2.16
xrp
XRP (XRP) $ 1.10
solana
Solana (SOL) $ 160.13
polkadot
Polkadot (DOT) $ 42.42
usd-coin
USD Coin (USDC) $ 1.00
dogecoin
Dogecoin (DOGE) $ 0.238842
USD
EUR
GBP
bitcoinBitcoin (BTC)
$ 61,733.00
ethereumEthereum (ETH)
$ 3,861.51
tetherTether (USDT)
$ 1.00
bitcoin-cashBitcoin Cash (BCH)
$ 612.63
litecoinLitecoin (LTC)
$ 184.11
bitcoinBitcoin (BTC)
53.222,18
ethereumEthereum (ETH)
3.329,14
tetherTether (USDT)
0,862135
bitcoin-cashBitcoin Cash (BCH)
528,17
litecoinLitecoin (LTC)
158,73
bitcoinBitcoin (BTC)
44,913.04
ethereumEthereum (ETH)
2,809.39
tetherTether (USDT)
0.727537
bitcoin-cashBitcoin Cash (BCH)
445.71
litecoinLitecoin (LTC)
133.95

Automated trading with HaasBot Crypto Trading Bots

Crypto Scams

Crypto Scams
Crypto Scams Still Persistent In 2021, SEC Warns About Red Flags To Watch
September 9, 2021
Poly Network
Here’s How Hackers Stole Over $600 million in the Poly Network Attack
August 12, 2021
The World’s Most Infamous Crypto Hacks and Scams
July 31, 2021
Cryptocurrency Exchanges
Cryptocurrency Exchanges and the Plague of Scams and Bans
June 29, 2021
What Role Do Cryptocurrencies Play In The Era Of Ransomware Attacks?
June 9, 2021

Blockchain/Cryptocurrency Questions and Answers

ICo Presale
The Science Behind ICO Presales…
October 14, 2021
Beginner’s Guide to Investing in Cryptocurrency
August 9, 2021
Short-Sell Cryptocurrency
How to Short-Sell Cryptocurrency: A Brief Overview
July 17, 2021
Klaytn
What Is Klaytn (KLAY) And How Does It Work?
July 16, 2021
Cryptocurrencies
Our Crypto Roundup Interview Asks- Do Cryptocurrencies Have a Future?
July 15, 2021


CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin62,808 2.46 % 3.56 % 14.80 %
Ethereum3,918.7 2.37 % 2.63 % 14.21 %
Binance Coin477.94 1.84 % 3.47 % 18.20 %
Tether0.9986 0.03 % 0.08 % 0.23 %
Cardano2.180 1.33 % 0.94 % 0.90 %
XRP1.110 2.10 % 0.95 % 1.93 %
Solana162.70 2.09 % 3.54 % 10.16 %
Polkadot30.87 2.19 % 17.29 % 10.73 %
USD Coin1.000 0.14 % 0.20 % 0.17 %
Dogecoin0.2428 2.06 % 3.33 % 5.88 %

bitcoin
Bitcoin (BTC) $ 61,733.00
ethereum
Ethereum (ETH) $ 3,861.51
binance-coin
Binance Coin (BNB) $ 471.67
tether
Tether (USDT) $ 1.00
cardano
Cardano (ADA) $ 2.16
xrp
XRP (XRP) $ 1.10
solana
Solana (SOL) $ 160.13
polkadot
Polkadot (DOT) $ 42.42
usd-coin
USD Coin (USDC) $ 1.00
dogecoin
Dogecoin (DOGE) $ 0.238842