SEC still eyeing ICO regulation

in #cryptocurrency8 years ago (edited)

The United States Securities and Exchange Commission (SEC) still has their sights set on regulating blockchain providers who engage in Initial Coin Offerings (ICO).

The SEC is not a force to be taken lightly or trifled with. While they remain an independent regulator, the SEC will work with local law enforcement to bring down the strong arm of the law if they have ample evidence of you selling unregistered securities to US citizens or otherwise interfering with the investment market that they help maintain. Many ICOs will explicitly forbid US citizens from taking part to avoid any sort of drama that may come of it.

Challenges to Regulators

Due to the distributed nature inherent to blockchain technology, which the infrastructure that ICOs support are built on, the biggest challenge facing the SEC is that of distribution. The fact that these tokens offered by ICO are not generated or transferred from any singular source means that regulators will have a tough time singling out actors outside of the founders of said ICO. If said founders are anonymized or even just from an uncooperative country, there is nothing that the SEC can do.

On top of this, there is speculation surrounding the jurisdiction of regulatory agencies in the token market at all. In 2014, Janet Yellen, Chair, Board of Governors of the Federal Reserve System clarified that Fed has no jurisdiction for Bitcoins.

"[T]he Federal Reserve simply does not have authority to supervise or regulate bitcoin in any way... [T]o the best of my knowledge, there is no intersection at all in any way between Bitcoin and banks that the Federal Reserve has the ability to supervise and regulate."

SEC still unsure how to treat Blockchain and ICOs

The Securities Act of 1933 and the Securities Exchange Act of 1934 broadly define "securities" to encompass any stock, bond, future, swap, investment contract, and more or less anything that is deemed a security. Meaning that they can essentially decide arbitrarily that a token is in fact a security.

While ICOs continue to run without government regulations at present, it's only a matter of time until the SEC fathoms some form of regulation that may ultimately cause a setback to Blockchain companies and their ICOs in the US. 

Source: 
https://cryptinex.com/showthread.php?tid=174