SEC report may end ICO boom


nnnAt present, the major media have responded to the SEC’s DAO investigation report. Basically, we are confused about the prospects for the ICO market, and it is unclear how serious the SEC will have for ICO. But it is undeniable that the market environment is about to change, ICO where to go to be observed.n
nnTranslated by: Inan
nFor the financial markets driven by the block chain, good days may have come to an end.n
nThe Securities and Exchange Commission (SEC) released a survey on Tuesday, concluding that the initial tokens issue (ICO) must comply with federal securities laws, just as the issue of shares, unless you can find effective reasons for exemption.n
nAccording to Balaji Srinivasan, a partner at venture capital firm Andreessen Horowitz, the ICO is essentially a special event, similar to the enhanced version of Kickstarter. Entrepreneurs raise capital by selling chain chains to enable investors to connect with their agreements, platforms and services. Then the token can be used as a liquidity asset online transactions.n
nICO has become increasingly popular over the past few months because it is very easy to implement and invests in liquidity. According to Autonomous Research, dozens of projects have so far raised $ 1.3 billion through ICO in 2017.n
nWhile critics blame the market for a bubble, the technician claims that this token sales represent the future of the financing of start-up companies and new Internet protocols and may change the global economy.n
nSEC’s report may make this view a paranoid.n
nThe agency made it clear that the Federal Securities Act applies to securities issuance and sales in the United States, whether the “issuing entity” is a traditional company or a decentralized organization, whether or not the securities are issued through the block chain technology.n
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nThe SEC said it would handle tokens on a case-by-case basis to clarify how to classify it, but it has determined that DAO is a transboundary organization.n
nDAO last year launched plans to become a decentralized investment fund. Investors use the digital currency of the ether-based network – investing in DAO, raising more than $ 100 million in funding.n
nBut DAO was exploited by its code loopholes to take tens of millions of dollars worth of money before it began to play a role. Then DAO crashed, and the founder of the ethertop created a new version of the network to reduce the losses caused by the theft.n
nThe SEC said on Wednesday that DAO’s chips had already acted to sell unregistered securities.n
nSEC Executives Joint Director Stephanie Avakian said in a press release:n
nn”Innovative technologies behind these virtual deals do not separate their securities issuance and trading platforms from regulatory frameworks that protect investors and market integrity.”n
nnHowever, the SEC chose not to raise any charges against any person involved in the DAO, nor did they consider any violation of any law.n
nLike many regulators of digital money and block chain technology, the SEC’s new report is somewhat out of date. The block chain is like a strange mix of securities and money.n
nThe SEC stressed in the press release the need to protect investors from immoral speculators and liars.n
nSEC’s corporate finance director William Hinman said:n
nn”Investors need to understand the basic facts behind any investment opportunities and make informed decisions.”n
nnSome companies have foreseen the arrival of regulation. When the San Francisco venture capital firm, Blockchain Capital, decided to raise $ 10 million through tokens in April, it was clear from the outset that the token should be seen as a security. As a result, the company’s ICO in the United States is only open to a small number of qualified investors.n
nBut this restriction does not seem to affect the financing of Blockchain Capital, its tokens have been sold, the company in just six hours to achieve the financing objectives.n
nHowever, the SEC’s report is also tough on the initial coins of these tokens, because online transactions make people around the world can buy this token.n
nThe SEC said in its report that if a particular token was deemed to be securities, any online exchange that carried out the tokens would have to be registered as a national stock exchange.n
nIf the exchange does not choose to comply with US securities laws, but prohibit US users to use or shelves some of the token, which will these new digital assets of the market has devastating consequences.n
nBut not all of the block chain tokens should be classified as securities, especially when the coin has some functionality on the associated software platform.n
nCoin Center said in a statement, SEC’s decision on DAO should not be considered for all tokens.n
nPeter Van Valkenburgh, research director at Coin Center, said:n
nn”We believe that substituting other tokens into the same facts and circumstances will find that some of the tokens do not conform to the definition of the securities, especially the tokens with potential utility, not just speculative investment, and we hope that the SEC will be able to give this Clear guidance. “n
nnAs to whether the SEC will take enforcement action against the tokens, it will be to be seen whether tokens will reconsider the ICO before proceeding with ICO.n
nAlthough the media and even some industry insiders are very familiar with the term tokens, but the bit currency and other encrypted currency and other through the ICO issued by the block chain tokens are very different. The encrypted currency is created by the “mining” of the encryption, rather than the public offering, which essentially has its chain-chain network, based on its block-chain, such as the ether-based tokens.n
nThe US Commodity Futures Trading Commission (CFTC) previously used Bitcoin and other similar encrypted currencies as commodities.n
nToken sales are a global phenomenon, and the SEC alone can not stop this trend. But the United States is the world’s largest pool of funds, as of Wednesday evening, SEC’s report has been through the social media industry has caused a huge impact.n
nAfter seeing the news, Barry Silbert, founder and CEO of Digital Currency Group, which has invested in dozens of chain-chain start-ups, said, “The SEC has included all ICO sponsors in the watch list From now on, no one can escape.n

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