SEC issues guidelines on ICOs and cryptocurrencies

SEC issues guidelines on ICOs and cryptocurrencies

All of what the people is talking about these last few days regarding to the crypto market is the most recent collapse, which took a hit of nearly 20 percent of the total capitalization in this last plunge.

However, something must be clear: The digital economy and cryptocurrencies in general are not going anywhere. Some of them probably will not survive, but the Blockchain technology that supports them is the future of information storage, not only in the financial sector, but any given one that requires data storage.

Because of that, more and more regulatory measures are being taken in order to incorporate digital currencies into the economy, which means two things: The first is that the ideal of anonymity for those investing in cryptocurrencies will probably remain as an utopian proposal.

But the second one has a positive counterweight, which is the advantage provided by regulatory frameworks that makes investors feel safer when putting their money in the digital sector.

The U.S. Securities and Exchange Commission (SEC) just offered some parameters on cryptocurrencies and Initial Coin Offerings (ICOs).

The document issued by the SEC is titled “Statement on digital asset securities issuance and trading,” and is related to the recent rulings on the cases of firms such as Paragon, Crypto Asset and AirFox, with which the Commission reached an agreement on certain disputes, and now they must refund the money to the people who invested on them last year.

The document states the cases of AirFox and Paragon, which now have to register their tokens as securities, rather than be allowed to exist as decentralized entities. Also, those who have invested in both must now contact investors to give them the information they would have had, had these tokens been registered as securities from the beginning.

“These two matters demonstrate that there is a path to compliance with the federal securities laws going forward, even where issuers have conducted an illegal unregistered offering of digital asset securities,” says the SEC in the statement.

This means now is required that any platform trading in digital asset securities and operates as an Exchange must register with the SEC as a national securities Exchange.

Furthermore, anyone providing a marketplace for bringing together buyers and sellers of securities must work out if, under U.S. law, they fall under the definition of an Exchange. If so, they must be registered as well.

Regarding the ICOs, any entity issuing an Initial Coin Offering or undertaking secondary trading in digital asset securities, will need to register with the SEC.

At the end of the document, the SEC clarifies that “The Divisions encourage and support innovation and the application of beneficial technologies in our securities markets. However, the Divisions recommend that those employing new technologies consult with legal counsel concerning the application of the federal securities laws and contact Commission staff.”

However, the Commission itself underlines that the statement only represents the views of the Divisions of Corporation Finance, Investment Management, and Trading and Markets, and it’s not a rule or regulation of the Securities and Exchange Commission.

 

By Alejandro Cortés

Source: SEC

  • Ing. Israel Pérez

    Ing. Israel Pérez

    Ing. en Sistemas Computacionales con especialidad en Tecnologías de la Información. Forma parte del equipo de Empowerment Systems, ITDA Corp y Bits Club.

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