By Alexander Geralis
Summary: The cryptocurrency space had an eventful July. Not only did the Bitcoin network prepare for the Bitcoin Cash hard fork, but the SEC also released a scathing report on ICO token sales. Given the uncertainty that lies ahead for ICOs, legal experts and compliancy firms are quickly gearing up to protect both investors and creators of ICOs. Cointelegraph keeps you up to date with the latest and most important regulatory news in digital currencies.
Thin red line
Potential ICO investors and those planning token sales were rocked earlier this month when the SEC issued a report on July 25. The SEC report offered a scathing indictment of ICOs, ruling that the vast majority of “initial coin offerings” were actually securities offerings dressed up under a thin veil.
We at Cointelegraph are in touch with some of the leading legal experts in the digital currency space, but there are not yet any clear guidelines for what the SEC might require in the future. Many planned are ICOs are still going ahead, but some are considering excluding US residents. This is not an ideal solution, however, as it seriously limits the amount of capital that such offerings might raise.
Ultimately, compliance costs are going to set a higher bar for entry into the ICO space. Companies contemplating ICOs will have to do thorough due diligence in order to avoid stepping afoul of regulators. This will limit the number of scammers able to solicit ICO funds, but it will also prove challenging to legitimate startups that need ICO funds in order to develop their products.
“I think the SEC Guidance regarding the DAO offering and the FBI’s takedown of BTC-e serves as notice to all issuers that their offerings are under scrutiny and they will be held accountable for breaking the law. While these actions have chilled the ICO market, they need not because platforms like Securrency ensure companies’ offerings are conducted lawfully, no matter where in the world their investors are located.”
– Ted Moskovitz, Securrency advisor and former SEC lawyer
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