SEC Advisor: Crypto Trading Platforms Hosting Initial Exchange Offerings (IEOs) Subject to Securities Law


There are problems ahead for companies which may be listing or facilitating Initial Exchange Offerings (IEOs), according to Valerie Szczepanik, the senior advisor of the U. S. Securities and Exchange Commission (SEC) for innovation and digital assets.

These companies, she affirmed, may be breaking the securities law of the United States. She talked about the whole issue during the Coindesk Consensus 2019 conference. The problem, she affirmed, is that crypto exchanges can facilitate token sales for a fee and if the buyers from the U. S., they can have some problems with the law.

In case the clients are from the U. S., the exchanges would need to follow the requirements and laws for local broker-dealers, national securities exchanges or even for alternative trading systems. If they are not able to do it, however, this can mean trouble.

Szczepanik affirmed that the platforms are engaging as broker-dealers despite what they believe that they are doing and added that if they are not registered, they should really keep their distance from the country because even selling to Americans can be considered operating in the U. S. market.

She did not mention any specific exchanges, however. We know that exchanges like Binance, KuCoin, OKEx, and Bittrex are all doing IEOs right now and getting a ton of money with fees because of this.

The most famous of these platforms, known as the Binance Launchpad, however, does not accept any client from the United States. This is obviously a measure that most of these companies have already devised in order to escape from problems like this one.

Szczepanik cited a case that happened last year against TokenLot as an example of the problems that can happen in a situation like this. According to her, the platform was helping ICOs to find buyers. Because of this, the SEC had to enforce its rules as the company was effectively acting as a broker-dealer.

People have been saying that IEOs are not better than Initial Coin Offerings (ICOs) for a while now, especially when you consider how unregulated they are. Unfortunately, that seems to be the truth.

In other news, Bitcoin has enjoyed its longest run up in nearly 17 months postings gains of:

Bitcoin’s price is $57,214.96 BTC/USD exchange rate today. The real-time BTC market cap of $1.07 Trillion currently ranks #1 with a chart dominance at 62.37%, daily trading volume of $27.38 Billion and live coin value change of BTC 3.97 in the last 24 hours.

Live Bitcoin (BTC) Price:

1 BTC/USD =$57,214.9592 change ~ 3.97%

Coin Market Cap

$1.07 Trillion

24 Hour Volume

$27.38 Billion

24 Hour VWAP

$56.24 K

24 Hour Change

$2,273.12

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