The "Reckoning" will upset the ICO market: the president of the CBOE
"The calculation will be in two waves." There is a big shift in the ICO market, and it should keep investors in the evening, "said Chris Concannon, President and COO of CBOE.
Concannon, also CEO of BATS Global Markets, told Business Insider that the ICO market is about to undergo significant regulatory changes, which would lead the SEC to classify ICO tokens as securities and to pursue industry players. .
Coming from a Wall Street trader, the statement could often be dismissed as FUD, but Concannon has long been one of Wall Street's most fervent cryptocurrency advocates, with CBOE launching the Bitcoin futures trade last year. Concannon believes that the SEC will first pursue the ICO market participants individually and then launch class action lawsuits against ICO teams and projects themselves.
While US officials have been repeatedly criticized for their unclear position on cryptocurrencies and ICOs, SEC chief Jay Clayton clarified some things by stating categorically that ICOs would not receive special regulatory treatment and that many ICOs in the market sell securities and the SEC would take steps to regulate them.
All ICO sales tokens that represent essentially a future portion of ICO's profits should be classified as securities, and Concannon says that future "waves" of regulation should not be taken lightly. The SEC has assigned dozens of cryptocurrency firms this year, and if Concannon is right, they are just getting started.
More than $ 5 billion has already been raised through country offices this year alone, with some estimates exceeding $ 7 billion. The SEC will now decide which projects that have received funding and issued tokens are actually issuing non-registered securities, which could legally result in project teams and investors themselves in hot water.
"The actual party who offered the unregistered piece, they might have been involved in issuing an unregistered title," said Concannon. "Anyone who sold this could be considered an unregistered underwriter."
Robert Hockett, professor of financial regulation at Cornell University, said it was unclear whether the SEC would retroactively seek legal action against all market participants for the time being.
"I do not think that is the case that the people involved in the business will be prosecuted as if they had broken the law," said Hockett. "But there is a bit of room for the exception with something particularly flagrant."
The real concern is that for investors, ICOs considered as unregistered securities could be totally devoid of value, triggering the second catastrophic wave of Concanon.
"If you sell someone an unregistered guarantee, you are liable to them if they decide to sue them," Concannon said.
If events unfold as Concannon describes it, US investors could be involved in free legal proceedings as investors seek to minimize losses and defend themselves against other parties by doing the same by filing lawsuits.
The market has had a number of class action lawsuits. An unhappy XRP investor hit Ripple with a class action lawsuit regarding the security classification of cryptocurrency, and similar lawsuits were filed against other projects, including Tezos.
Professor Hocket believes that prosecutions of this nature can effectively take place in court.
"If they can prove that investors were misled and misled by people who were better able to understand the regulatory framework, but still inculcated investors - no pun intended - false security, then some lawsuits would have deserved."
Hockett said it is a natural process for any new popular asset that is not regulated.
"It's a legal life cycle of every new asset that is becoming very popular," he said. "It was true for tulips, rotten bonds and mortgage-backed securities, and now crypto," he said.
