Examining the SEC’s Latest ICO Investment Guide During Ongoing Regulatory Discussion


If you are interested in launching or participating in an Initial Coin Offering (ICO) based within the United States, we got good news for you. The U. S. Securities and Exchange Commission (SEC) has decided to reiterate guidelines on how ICOs are supposed to work.

Now, a new dedicated session has been opened on the regulator’s site in order to list aspects of ICOs that are considered by the SEC to be essential. The section is divided into two parts: one for market professionals and the other is for investors.

This all a part of a larger effort to regulate the crypto industry in the country, something that the SEC is trying to do for a long time but having a hard time as there is a lot of confusion about how different agencies will regulate crypto assets.

The Regulation Is Not Exactly New

However this may be interesting, the truth is that the regulation’s page existed for almost a year now. The content was created back in March 2018 and now the SEC has opted to draw new attention to it.

What happened now is that the SEC has decided to highlight this guide again, in order to help the sector to understand that there is current legislation better now, as the material is one of the most accessible guides to how ICOs are actually regulated in the country so far.

The material explains what an ICO is and how it works, as well as to explain how can investors participate. It summarises the current perspective of the SEC on the matter and affirms that most ICOs can be considered securities, so investors need to register with the SEC before investing.

Obviously, the guide also comments on the risks of investing in ICOs. As most people who invested last year know, the risks are real and, in fact, they are pretty big. According to the guide, while ICOs can be a new and efficient way to invest, they can also have a high risk of fraud and manipulation because these assets are far less regulated than the most traditional ones.

Apart from that, there are obvious bear market issues. Most successful ICOs from 2017 to 2018 were not very profitable as cryptos plummeted and lost around 90% of their value last year.

The Future of ICOs In The U. S.

At the moment, the SEC has a good grasp on the regulation of ICOs but the authorities, as a whole, are still discussing how crypto will be regulated, which has caused the market to be very fragmented in the country as some states are considering digital assets to be more and others do not, which influences on whether you need a money transmitter license to have a business or not.

Last week, the SEC chairman, Jay Clayton, has talked about ICOs and affirmed that they need more investor protection in order to work out properly. Another SEC commissioner, Heister Peirce, also believes that regulation is needed in order to give more freedom for the industry.

Some people, like Arthur Hayes, the CEO of BitMEX, have anticipated that ICOs will have a strong comeback in 2020, but at the moment, the industry still lacks regulation and investor protection, so let’s wait and see.

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