Digital currency hot trend to create millions of dollars, but the US investors can not participate


nnnIt is an important determinant of the ICO regulation of the encrypted currency. However, the uncertainty of the current US securities law to ICO enterprises to bring legal risks. For this reason many projects specifically limit the participation of US citizens. But there are some projects that work closely with lawyers and are still open to US investors, such as Cosmos. But nevertheless, ICO is likely to experience the risk of securities in other countries. So there are items such as Metal Pay for investors who are “qualified investors” or who have a personal relationship with the company.n
nnTranslation: Annie_Xun
nSome analysts said the company was worried that if buyers were scrambling to buy products that did not confirm the dollar value, there could also be a risk of fraud, once the money was lost, could be questioned by the Securities and Exchange Commission (SEC).n
n”Everyone is afraid of the SEC, they can reach all the people in the world,” said William Mougayar, editor of The Business Blockchain in May New York’s “Token Summit” organizer.n
nDo not allow US citizens to participate in the company “to protect their own way, because the SEC will not stare at consumers, but the company.”n
nSEC refuses to evaluate.n
nBefore buying such new digital currencies (based on block-chain technology, such as Bitcoin), investors will usually confirm that the investor is not a US citizen or a green card holder. The tokens sales site usually shields US computers based on IP addresses.n
nCoinMarketCap shows that the price of Bitcoin doubles this year, and the market value of all digital money has more than tripled, at around $ 80 billion.n
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nDAO.Casino screenshot and EOS tokens salesn
nICO block chain project financing, investors can purchase part of the project through the purchase of digital network tokens. However, most projects have just started, some people worry about the speed of the project a lot of financing. Financial research firm Autonomous NEXT shows that just last month, the amount of financing accounted for half of this year’s $ 1.2 billion.n
nTezos block chain project tokens to sell 13 days to raise 200 million US dollars, once again to break the record. Switzerland’s Tezos said there is no exception to exclude the country’s investors.n
nAmerican residents who hold Bitcoin or Taishu can also buy tokens, but they can not participate in it by broker Bitcoin Suisse.n
nBitcoin Suisse CEO Niklas Nikolajsen said, “We are unable to provide services to US customers due to US IRS encrypted assets and encrypted financial services uncertainty and the Foreign Account Tax Compliance Act.”n
nThe challenge to the token sales regulation comes from whether or not the securities definition is used for digital tokens. The current definition of the SEC relies on the Dutch test in the 1946 US High Court case. Provisions of securities involved in the investment of ordinary enterprises, investors are expected to profit.n
nPart of the dispute comes from whether the tokens buyers only use it as a stock, and expect the price to rise, or to hold the token to participate in the block chain project approach. If the token is used as a stock, then the seller needs to register in the SEC, otherwise the sale is illegal.n
nRyan Schoen, senior financial services policy analyst at Washington Research, a research firm, said:n
nn”The lack of clarity is indeed a problem, especially for trying to adapt to the field of investment institutions. This is similar to the emergence of the Internet in the 1990s.”n
nnThe SEC did not completely ignore the encrypted currency. In 2014, the “investor warning” was issued, saying that “using Bitcoin may limit your ability to recover in the event of fraud or theft.”n
nThe SEC is also monitoring tokens. Valerie Szczepanik, who is responsible for the development and issuance of tokens and financing, must protect investors, although it is not a formal statement, but Valerie Szczepanik, head of the SEC’s distributed book group.n
nDevelopment of the block chain project Cosmos, Solo Tiermint Chief Strategy Officer Jim Yang, who addresses Bitcoin and the Ether Square problem, said Jim Yang,n
nn”If you are a US citizen, it’s harder to do ICO, but it’s not impossible.” In the US, it is subject to strict regulation, and the regulatory effort depends on how you can do ICO, such as ICO. “n
nnHe said Cosmos financing in early April worked closely with lawyers, so American citizens could also attend, except for the residents of the two states. “We just want to ensure that it is in a safe place, so we follow any direction that the law may be involved.”n
nNot all ICOs are going well, and digital money lovers want to see how the block chain project performs its business plan.n
nCoinDash’s ICO lost $ 7 million due to hacker attacks. The digital currency trading platform says it will still distribute the tokens to the site to close the forward fraud account.n
nA large number of other tokens buyers to let the currency network congestion, resulting in fluctuations in currency prices.n
nTezos Foundation founder Johann Gevers said:n
nn”It is the responsibility of the participant to check whether the heap is legal.”n
nnHe said that the young block chain project such as Tezos could not afford “millions” of national or US state legal research fees.n
nMarco Santori, head of law firm Cooley, said:n
n”It is certain that the exclusion of US investors outside the token sales can not guarantee the safety of the company.” He provided legal advice to many ICO projects, but he could not talk about a particular project.n
nn”Every country in the world has some securities laws, so just avoiding US securities laws does not mean you can avoid securities laws in other countries.”n
nnSome developers are still trying to replace the way of financing.n
nSimilar to the block chain application Venmo’s Metal Pay co-founder Marshall Hayner said:n
nn”We think ICO will disappear, and we think the SEC will put pressure.”n
nnHayner says his company does not have an ICO, but only $ 3 million in forcibly sold to ‘qualified’ investors, or only for people who have a personal relationship with the company. “Of course there are more tokens for qualified investors only.”n

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