SEC “Investing In America” Event: What We Learned About ICO Security Regulations?


On June 13, 2018 the US Securities and Exchange (SEC) opened a discussion, “Investing In America”, to the general public that addresses the current regulations that have been placed on ICOs. The receiving end of the questions allegedly consisted of five SEC Commissioners, some including Commission Stein, Commissioner Piwowar and the chairman of SEC, Jay Clayton.

As per existing information, the discussion revolved around the current issues, namely that of ICOs, scams and misrepresenting projects, and the entirety of blockchain technology along with its future presence.

Based on the questions asked, which seem to focus on the impact of regulations and losing businesses to different parts of the world, the SEC does not seem to oppose blockchain technology, in reality, they are embracing it.

When asked the question on SEC’s position within blockchain technology, Chairman Clayton replied,

“Blockchain technology has incredible promise for the securities and other industries. I think we can all agree on that. He also added that blockchain technology can achieve many things with “reduced transaction costs, including costs of verification.”

This was in response to the question, “Does the SEC have any official position that relates to Blockchain technology because right now without lot of clear guidance, a lot new technologies are moving overseas. How will you keep those technologies here in the U.S?””

For Chairman Clayton, raising funds through ICOs has become common. However, he believes that for any investment made, he should be getting something in return, namely, “a securities offering”. He further provided details as to the approaches firms can take in efficiently running ICOs – that is through a

“private placement or a public offering. We’ve built a 19 trillion-dollar economy, an economy that’s the envy.”

Despite SEC’s support for blockchain technology, they will stand firm on the ICO regulations. Based on the responses, it is clear that anyone who chooses to raise funds through ICOs must abide by the laws, as there’s no other way to it.

Here are a few more interesting soundbites from SEC's Investing in America meeting yesterday:

“[Blockchain] technology [has been] used to apply to fundraising.. We’ve been very clear… for a long time on how to conduct fundraising when you’re offering securities. Much of what I have seen in the ‘ICO’ space is a securities offering. It is raising money for a project where I give you my money, you give me some type of right back that reflects a return on a project, that’s [a] securities offering… I don’t know how much more clear I can be about it”

Also Jay Clayton had this to say regarding how to go about following the SEC's rules:

“There’s 2 ways to do it. You can do a private placement or a public offering. We’ve built a 19 trillion dollar economy, an economy that’s the envy of the world… following those rules. I expect people to follow them.”

What do you guys think – after originally saying “Bitcoin No, Other Crypto Yes as Securities” from saying I dont know how I can be anymore clear in that “ICOs are Securities” and “Tokens Are-Not-Exempt-From-Regulations” then of course all of the John McAfee debate dialogue that has been brewing since the original statements.

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