Are All ICOs Now Officially "Securities" According to the SEC?
A few parts jumped out at me:
Those participating in unregistered offerings also may be liable for violations of the securities laws.
So... if you bought an ICO token the government might come after you?!?
"The innovative technology behind these virtual transactions does not exempt securities offerings and trading platforms from the regulatory framework designed to protect investors and the integrity of the markets," said Stephanie Avakian, Co-Director of the SEC's Enforcement Division.
"...and trading platforms..."? What does that mean for exchanges facilitating the trade of ICO tokens or any cryptocurrency tokens which might be considered ownership in a distributed autonomous organization (such as STEEM)?
I know I'm biased against government, but "integrity of the markets" sounds to me like "things we can control."
In light of the facts and circumstances, the agency has decided not to bring charges in this instance, or make findings of violations in the Report, but rather to caution the industry and market participants: the federal securities laws apply to those who offer and sell securities in the United States, regardless whether the issuing entity is a traditional company or a decentralized autonomous organization, regardless whether those securities are purchased using U.S. dollars or virtual currencies, and regardless whether they are distributed in certificated form or through distributed ledger technology.
Essentially, "We're not going to arrest you now, but we're putting this out there so we can arrest you whenever we want."
Why can't they just get out of the way and let markets regulate themselves? I'm so frustrated by the "to protect you" attitude of government. The blockchain space is one of the most exciting and innovative areas of global technological development going on right now and they come along with a report like this to potentially screw it over.
I'm pretty angry about this. Yes, I feel for those who get scammed by shady ICOs or hackers, I really do. I feel more for those who are violated every single day by governments and their monopoly on the initiation of force in a geographic region. Peaceful people, going about their lives, are threatened with fines and being caged if they don't follow arbitrary rules to "keep us safe".
Does this mean the ICO party is over?
Is this why more and more ICOs do not allow U.S. citizens to participate?
As U.S. citizens buying and trading cryptocurrencies, are we now going to be buried under more red tape, government "regulations", and new threats of violence?
I'm not a lawyer, so I don't know the implications of this report, but I'm currently not happy about it.
What do you think?
You can read the full report here:
Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO
Related: What Is the Howey Test?
Luke Stokes is a father, husband, business owner, programmer, and voluntaryist who wants to help create a world we all want to live in. Visit UnderstandingBlockchainFreedom.com