SEC ICO Enforcement

[HughCaires]

So with the news that ICOs now count as securities, I had a few questions about the SEC's enforcement of security laws. From what I understand, "participation" in an ICO is what is being targeted but I am a little confused on what "participation" entails. Does this mean that the entity selling the new coin is subject to enforcement or is it both the seller and investors.

If it is both, would the enforcement be to seize funds/coins from investors? Also, if someone invested in coins during an ICO but waited a week or two until the ICO ended, would the selling of ICO-funded coins still count as securities? I would assume that it would not because that would mean BitCoin would also be subject to these regulations, right?

I was hoping to invest in an ICO coming up in September that seems very legitimate (and who knows they may register with SEC) but this is throwing a wrench in my plan.

 

[chutchmcgillicutty]

Get VPN and then who cares, do whatever you want

[dbc23]

The memo, at this point, simply adds clarity to what they've evaluated ICOs to be.  It warns of potential for fraud and limited options for restitution if you are defrauded.

After this publication I see it having zero currently substantive effects.  Hell, ICOs have been largely policing themselves as thoughthey DO fall under SEC jurisdiction.  Well, most of the larger/more honest ones have anyway.

Right now this just another juicy FUD bomb, the day they draft regulation or prosecute someone is the day things will truly change.  Even then SEC regulation will likely ultimately bring some stability to the markets, which is a good thing.

[hammo]

prof emin gur sirer said " SEC's ruling on The DAO is quite specific, and applies pointedly to, well, DAO-like investment funds. Not to all ICOs by a long shot."
this is the source;
https://twitter.com/el33th4xor/status/889978928273772545

[HughCaires]

The memo, at this point, simply adds clarity to what they've evaluated ICOs to be.  It warns of potential for fraud and limited options for restitution if you are defrauded.

After this publication I see it having zero currently substantive effects.  Hell, ICOs have been largely policing themselves as thoughthey DO fall under SEC jurisdiction.  Well, most of the larger/more honest ones have anyway.

Right now this just another juicy FUD bomb, the day they draft regulation or prosecute someone is the day things will truly change.  Even then SEC regulation will likely ultimately bring some stability to the markets, which is a good thing.

Thanks this is helpful. I agree that it seems like a step in the right direction. Just didn't want it messing with my short term plans honestly 😂

[bbc.reporter]

Get VPN and then who cares, do whatever you want

This is bad advice. The SEC is already giving fair warning to all the ICO founders. Be compliant or they will be accountable to go to prison. This does not signify well if you are an ICO investor because the price might go down. Cryptocoin exchanges will also be accountable.

[ccoinca]

I'm thinking this applies to ethereum tokens also?

[jman0war]

I found a good post explaining the SEC regulations in general, or the possible opt outs here:
http://decentralizedlegal.com/reg-s/

BUt, what is so different about the US in this respect compared to the EU?
Or even, individual EU member states, don't they all have their own regulatory equivalent to the US's  SEC?
How do they regard ICO's?

[Zer0Sum]

Does this mean that the entity selling the new coin is subject to enforcement or is it both the seller and investors.

If it is both, would the enforcement be to seize funds/coins from investors? Also, if someone invested in coins during an ICO but waited a week or two until the ICO ended, would the selling of ICO-funded coins still count as securities? I would assume that it would not because that would mean BitCoin would also be subject to these regulations, right?

The SEC exists to protect investors...
They do not have the resources to target small investors.

A good idea is to get legal advice from internet chat boards... or random professor media whores 

[The Sceptical Chymist]

Get VPN and then who cares, do whatever you want

This is bad advice. The SEC is already giving fair warning to all the ICO founders. Be compliant or they will be accountable to go to prison. This does not signify well if you are an ICO investor because the price might go down. Cryptocoin exchanges will also be accountable.

Shoot, they threw that Silk Road dude in prison for life.  Life.  I get that it was for drugs and possible murder for hire, but the government isn't messing around with crypto.  The early stage is where they make examples of people.  I wouldn't touch these scammy ass ICOs anyway.  Too much BS, too much uncertainty.

[jman0war]

Get VPN and then who cares, do whatever you want

This is bad advice. The SEC is already giving fair warning to all the ICO founders. Be compliant or they will be accountable to go to prison. This does not signify well if you are an ICO investor because the price might go down. Cryptocoin exchanges will also be accountable.

Shoot, they threw that Silk Road dude in prison for life.  Life.  I get that it was for drugs and possible murder for hire, but the government isn't messing around with crypto.  The early stage is where they make examples of people.  I wouldn't touch these scammy ass ICOs anyway.  Too much BS, too much uncertainty.

Wasn't in actually IN the US?
And i read he was charged with money laundering, conspiracy to traffic narcotics and computer hacking.
Nothing about SEC violations.

[Foex]

As far as I know, none of the ICO are based in US nor they offer ICO to the US residents. Bad for those US residents who bought in the ICO using VPN

[comp]

Looking at the SEC ruling of yesterday I would stay away from ICOS and go to coins that were distributed in a non ico way. So basically only community coins without a company attached to it. That also excludes ETH

[williamevanl]

Looking at the SEC ruling of yesterday I would stay away from ICOS and go to coins that were distributed in a non ico way. So basically only community coins without a company attached to it. That also excludes ETH

Hmm, it seems anything up to this point would at least be 'grandfathered in'. The don't typically release statements and then retroactively start charging people.

[StealthCoin1]

no one really care SEC enforce or not

[comp]

Looking at the SEC ruling of yesterday I would stay away from ICOS and go to coins that were distributed in a non ico way. So basically only community coins without a company attached to it. That also excludes ETH

Hmm, it seems anything up to this point would at least be 'grandfathered in'. The don't typically release statements and then retroactively start charging people.

Not people but exchanges and companies. So either exchanges register as a normal bank or delist all potential securities. Like almost all altcoins and icocrap. Applying for a license will be an enormous effort transforming an exchange into a bank with all rules that apply to that. Only from and audit perspective and technical perspectjjve that is a huge effort.

So delist all potential coins that can be seen as a security is the easy route. Bye bye eth, eos, Tezos, Bankor and a whole list of other coins. Also all Insta or premined or hybrid forms (dash) can be seen as an ICO.
Only coins that pass the test are  coins not related to companies or organizations

[DylanJones]

There's a lot of misinformed information being spread in this thread. Research the difference between security investment tokens and utility product tokens.

[YoyodyneSystems]

I expect to see a lot of new launches of traditional PoW and PoS coins come back into favor.

I would really like to see mined coins and PoS coins take the show back from ICOs for awhile.
There is no return to be had anymore on any of these ICOs and the scam level of ICOs has reached a fever pitch right now.

Will be interesting to see how exchanges react to SEC news.

--Will ICO coins be delisted? Will they be restricted to non-US traders only?
--Or will exchanges get proper approval from SEC? Do they even need approval?
--Will they fight it? Will they work out a deal? Or will they disregard it until action comes?

[L]

Not all ICOs fall under the definition of securities, ICOs like the DAO are securities.

USA citizens need to inform themselves about securities law, everyone else should be very careful with USA based exchanges, government can decide to apprehend exchange funds at any time.

[pearlmen]

Get VPN and then who cares, do whatever you want

If this is what you are suggesting, then be sure to do it under the radar and not to move money that will attract attention because when it gets to that, hiding behind VPNs might not be enough but the issue here is not to go after the small contirbutos rather the cashiers of the ICOs who see that as a means to get rich quick in which I am in support if there is a body ready to make them responsible as the only ones who are to get over the hurdle, we are sure it will worth it.