SEC Chief to Believe That Not All ICOs Are Fraud

Jay Clayton talked with Princeton students on the topic "Cryptocurrency and Initial Coin Offerings"
06 April 2018   1120

Speaking at an event at Princeton University, the chairman of the US Securities and Exchange Commission, Jay Clayton, in response to a question whether all ICOs are fraud, said that it was "absolutely not".

According to Clayton, the measures his agency is taking in recent months should help the development of crypto industry.

Is the approach taken in Washington by the SEC adversely affecting distributed ledger technology in other areas? My quick answer is that my hope is that it's actually helping - because this technology is being used for fraud and to the extent that it's being used for fraud, history shows that government comes down harshly on that technology later.
 

Jay Clayton

Chief, SEC

One of the problems that regulators see in this area, according to Clayton, is to attempt to classify the ICO tokens as utility tokens, which, according to the idea of ​​the organizers of such campaigns, should free them from the obligation to comply with the requirements of the securities law. At the same time, in fact most of these tokens have the characteristics of securities.

If a startup "offering something that depends on the efforts of others, it should be regulated as a security" Clayton said.

If I have a laundry token for washing my clothes, that's not a security. But if I have a set of 10 laundry tokens and the laundromats are to be developed and those are offered to me as something I can use for the future and I'm buying them because I can sell them to next year's incoming class, that's a security. What we find in the regulatory world [is that] the use of a laundry token evolves over time. The use can evolve toward or away from a security. We found that the areas of application of laundry tokens can change over time, both in the direction of acquiring the qualities of a security, and in the opposite direction. 
 

Jay Clayton

Chief, SEC

Nations may experiment with sovereign cryptocurrencies, while startups might develop different kinds applications with the underlying technology, he added.

ICOs to Lose Popularity, Diar Research Say

Diar assumes that in the future unregulated ICOs won't attract significant attention
11 December 2018   49

Although since the beginning of this year, ICO-startups have managed to raise over $ 12.2 billion, the November figure was only $ 65 million, according to data from a new study of the Diar portal.

According to analysts, the once popular method of financing, which allowed startups to attract tens and hundreds of millions of dollars in the absence of any product, exhausted itself against the background of fears about regulators' actions and the general dynamics of the cryptocurrency market, which did not leave retail investors with anything except for an unpleasant aftertaste.

This version is also supported by the data from the TokenData portal, which Diar leads in his research. Even with respect to the October levels, which constituted only a small fraction of what could be collected a few months ago, the November figures were 3 times lower.

Diar assumes that in the future unregulated ICOs as we have known them over the past years will no longer attract significant attention and will give way to regulated platforms of tokenized securities.