SEC Issues Investor Bulliten About Initial Coin Offerings - It's Consumer Protection DUH!

Don't Be Scared - They Did It For You

On July 24, 2017 the CFTC (Commodities Futures Trading Commission) approved the startup company, LedgerX, for a DCO licence to provide derivatives of cryptographic assets. They made history - regulation, tearing down barriers, building best practices, and most importantly accepting the new paradigm.

For more on the CFTC decision: LedgerX granted DCO License...

Today - The Securities and Exchange Commision released the following statement:

Securities and Exchange Commission Statement - July 25, 2017

Depending on the facts and circumstances of each individual ICO, the virtual coins or tokens that are offered or sold may be securities. If they are securities, the offer and sale of these virtual coins or tokens in an ICO are subject to the federal securities laws.

On July 25, 2017, the SEC issued a Report of Investigation under Section 21(a) of the Securities Exchange Act of 1934 describing an SEC investigation of The DAO, a virtual organization, and its use of distributed ledger or blockchain technology to facilitate the offer and sale of DAO Tokens to raise capital. The Commission applied existing U.S. federal securities laws to this new paradigm, determining that DAO Tokens were securities. The Commission stressed that those who offer and sell securities in the U.S. are required to comply with federal securities laws, regardless of whether those securities are purchased with virtual currencies or distributed with blockchain technology.

The decision by the SEC is in my opinion the single greatest step toward consumer protection any government institution has taken in the relatively new crypto currency markets. This decision isn't about money, it's about protecting you from yourself. Protecting consumers, traders and investors from inept and/or nefarious organizations - the SEC statement is the start.

Crypto Currencies Are Now/Going To Be Recognized as a Security

The SEC another hugely important U.S. Institution, is recognizing the cryptographic asset class, just a day after the CFTC approved LedgerX for a DCO. If you read between the lines of this statement - the SEC likened the sale of the DOA tokens to selling unlicensed securities - like if you bought stock certificates to an IPO off a gas station attendant. While the SEC is recognizing the potential legitimacy of the various crypto currencies and initial coin offerings - they are also addressing the risk of ignorance and criminality. I welcome all of these things!

No More Ponzi Coin - At least not in North America

Ponzi Scheme's? There are definitely a few due to a lack of oversight and regulation. I am not naming any, but again, the die hards, fan boyz, they will shout decentralize, no reg's, anarchy! Honestly, that is all well and good, and most of you are just dabbling, or have the income to support what I would call gambling. But, what about those who don't? Or, what about when you finally get burned by probability?

The decision doesn't hinder your ability to participate in crypto, but it does limit the selection of what you can buy. This is a good thing, as being considered a qualified security means that it is not a ponzi scheme.... or far less likely to be one anyway.

Regulators are moving in fast and so far its all been predictable and positive. Crypto has a place in the world as a legitimate currency and vehicle for trading and investment.

Let me know what you guys think about the news in the comments!

<3 @satchmo

For More On Ledger X or to Read the SEC Bulletin
LedgerX granted DCO License...
SEC Bulliten