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   1420

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.

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Top-3 Ongoing ICO 8th - 14th July Acc. to Our Readers

Let’s check which ongoing ICOs from 8th to 14th July are considered the best among our readers
16 July 2018   131

Our readers are dedicated cryptocurrency enthusiasts and fans of blockchain technology. We provide them with the ability to express their opinion regularly. Let’s check top three upcoming ICO according to our readers.

1. i-chain 

Insurance platform and ecosystem, which will transform world insurance industry. Platform which the will automate insurance business, which will run over blockchain to ensure transparency, which will be provided for free. I-chain will ease barriers for new players to tap the insurance market; it will allow insurance companies to significantly cut their costs and get access to new customers; it will allow consumers to get tailored insurance products at lower prices. Insurance companies will be able to develop and sell their own insurance products on the platform, saving a big chunk of operational costs by using the built-in functionality. Micro-businesses will be able to provide tailored services, such as a call center in a specific language or expertise in certain areas, and many more. Individuals will be able to provide small services as insurance brokers or emergency commissioners, and many others. Global and Independent software developers will be able to offer their applications and services to insurance companies on the platform’s internal marketplace, similar to the AppStore. Together, this will make insurance more affordable and fair and will stimulate the growth of the USD$4+ trillion global insurance market. Project has got positive feedback in media.

There's no info on the raised funds.

2. Smart City Eco 

Smart City Eco is targeting all mayor global economy industries, we want to provide smart solutions based on blockchain technology and target most lucrative. Tapping into global markets and multi-trilion dolars industry. Our platform will be solution for all mayor players in global online economy: Online-Shopping and E-Commerce worldwide is worth trilions of dollars, online gaming and gambling industry is a bilions of dollars industry, online gaming which has unlimited potencial, implemented in one online smart platform can bring a smart economy progress and development of new technology on top of it. On top of that add economy into the equation and you will create utopia for online consumers, with limited number of tokens, that can not be printed anymore on top of it and by number of tokens decreasing by burning the part of extra tokens, we have created solution for few of the worlds most prominent problems that is money, poverty, inequality in society. Help us join our journey.

There's no info on the raised funds.

3. LipChain 

Surfers with sponsors, unofficial competitions and year-round training habitat. 60m+ worldwide surfers will be able to earn tokens by simply practicing their favorite sport, can become champions faster and contribute to cleaner oceans in the process.

LipChain ICO
LipChain ICO

There's no info on the LipChain raised fund except pic above.

We will keep our eyes on these projects. Stay tuned!