Is This the End of Air Drops?

One of the largest crypto exchanges in the world just tipped its hand towards some big regulations the SEC will be rolling out. Yesterday morning news hit that Rise was going to be taken off of Bittrex. Immediately the Rise account tweeted

We are in direct talks with Bittrex and Rise team will do everything it takes to remain listed and comply with their requirements.

Rise Vision PLC (@RiseVisionTeam) February 2, 2018

RISE's price was just under $.40 when this news broke, and fell all the way down to $.16. By nightfall the CEO of Rise tweeted

$Rise will not be promising or providing any airdrops to Rise holders in the future in order to stay compliant with SEC regulations and remain on Bittrex.

Cormac Lucking (@CryptoPioneer) February 3, 2018

In what appears to be a confirmation that Rise will not be delisted, Cormac Lucking revealed that Bittrex and the SEC aren't messing around with air drops. Loads of cryptos with substantial market caps are running promotional air drops as we sit here now, which is why I'm not that critical of Rise for this mistep. On January 18, 2018 an attorney from the SEC Dalia Blass wrote a letter to two large fund managers in which she ponders the question of how "cryptocurrencies and related products would satisfy the requirements of the 1940 Act and its rules"? Air drops were questioned right away by Blass who asked "What policies would a fund implement to identify, and determine eligibility and acceptability for, newly created cryptocurrencies offered by promoters (e.g., an “air drop”)? How might a fund account for those holdings if the fund chooses to claim such cryptocurrencies?" To me creating a system that tokens and coins would legally have to be handled after getting air dropped doesn't seem too difficult, but skeptical Hippo eyes in the crypto industry have always questioned that a token airdrop may not spare you from securities regulation.

Bittrex is making billions of dollars a year, so they would never jeopardize their relationship with the SEC over the listing of a tiny alt coin. A line has been drawn in the ground by the SEC.

For many reasons including; ease and security, investment funds are going to be one of the massive movers of the total crypto market cap in the next 18 months. It's admirable the SEC is working hard to solve these problems so that investment funds can have operational standards and also be properly regulated in their holding and trading of crypto. Dalia Blass seemed to be genuinely looking for answers so I think that reaching out to Blass with constructive suggestions seems appropriate. As of me pressing post, Bittrex has not taken down their notice on the RISE-BTC exchange that "This market is getting delisted on February 9th, 2018."