SEC expressed its position on the issue of ICO

Official United States Securities and Exchange Commission statement regarding initial coin offering - tokens should be considered securities
26 July 2017   2134

Initial coin offering (ICO) is a means of crowdfunding the release of a new cryptocurrency

The United States Securities and Exchange Commission (SEC) issued an official statement in which it expressed its position on the issue of the initial coin offering (ICO). According to the SEC, tokens should be considered securities along with stocks with the traditional exit of companies to the stock exchange.


Distributed database that is used to maintain a continuously growing list of records, called blocks

This decision was made by the SEC following an investigation into the hacking of the decentralized autonomous organization The DAO in June 2016. Then the attackers took advantage of the vulnerability in the code and stole tokens worth about $ 50 million.

In the report, the SEC warns market participants that the sale of digital assets by "virtual" organizations that use blocking technology for this purpose is subject to the requirements of federal securities laws.

The SEC's Report of Investigation found that tokens offered and sold by a "virtual" organization known as "The DAO" were securities and therefore subject to the federal securities laws. The Report confirms that issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies. Those participating in unregistered offerings also may be liable for violations of the securities laws. Additionally, securities exchanges providing for trading in these securities must register unless they are exempt. The purpose of the registration provisions of the federal securities laws is to ensure that investors are sold investments that include all the proper disclosures and are subject to regulatory scrutiny for investors' protection.

From United States Securities and Exchange Commission official statement

As the Commission notes, such measures are needed to protect investors and control their actions.

The SEC is studying the effects of distributed ledger and other innovative technologies and encourages market participants to engage with us. We seek to foster innovative and beneficial ways to raise capital, while ensuring – first and foremost – that investors and our markets are protected. 

Jay Clayton
Chairman, SEC

With regard to the investigation of the The DAO hacking and the possible violation of federal securities laws by organizations and individuals, the SEC notes that although the fund was positioned as a "crowdfunding contract", it did not meet the relevant regulatory requirements. In particular, The DAO was not a broker / dealer or a fundraising portal, registered with the SEC and the Financial Institutions Regulatory Agency (FINRA).

Nevertheless, considering all the circumstances, the SEC decided not to bring charges against the participants of the deal with The DAO. However, the Commission warned market participants that federal securities laws extend to all transactions with assets in the US, regardless of whether the organization is real or virtual, and whether transactions were conducted for dollars or crypto currency.

In addition, the SEC issued an explanation for potential investors about the peculiarities of the ICO and their possible dangers.

TON Mainnet May be Launched in March

During January there should be a meeting of the project investors with a TON demonstration 
23 January 2019   75

Telegram Open Network (TON) blockchain platform can be presented at the 49th World Economic Forum (WEF) in Davos, Switzerland. However, there is no official information about Pavel Durov’s speech at WEF yet.

At the same time, according to The Bell, during January there should be a meeting of the largest project investors with a demonstration of the test version of TON. The launch of the main network is expected in March.

According to the latest TON roadmap, which appeared in the Telegram-channel @Tgram in early January, the launch of the main network may be postponed for 2-3 months due to the “innovative nature of the development”.

TON is about 90% ready, and the latest news about the platform will appear in February 2019. At the same time, an audit of Testnet is scheduled in order to find errors and flaws.

Pavel Durov hadn't provide any official comment on the situation.

Note that initially the launch of a test network for TON was planned for the second quarter of 2018. At the end of the same year, a full launch of the platform and the Telegram Wallet wallet was planned.

Earlier it became known that Pavel Durov filed an application for the liquidation of the Telegram Messenger LLP. According to the assumption of some experts, the decision will relate exclusively to changes in the corporate structure of the company.