Amid the probes initiated by the Securities and Exchanges Commission (SEC), there is a portion of the regulatory body that believes that not all ICOs are bad.
Before the Medici conference, SEC Commissioner Hester Peirce said, “Innovation is always a challenge for regulators. We are used to the way things have been done. Our rules have grown up in response to past technologies. Figuring out whether and how they apply to new ideas is difficult. Technology’s promise is too great, however, for us to bury our heads in the sand. I am here today to ask you and others to help us learn more about the technology so that we are able to think about the regulatory obstacles that may stand in the way of crypto-technology’s ability to improve our lives.”
Elaborating on her point, she talked about cryptocurrencies such as bitcoin and Initial Coin Offerings (ICO). She opined that although there are many ICOs that can be deemed as securities but not all of them the same label.
She said, “This is not to say that all ICOs must be deemed securities offerings. Given the undeveloped nature of this area, I am wary of any blanket designation for all ICOs. Instead, the best path forward, at least for the time being, is to evaluate the facts and circumstances of each offering.”
Designating certain ICOs securities offerings does not end the inquiry once and for all. What, for example, are the coins once the environment is completed? Are they still securities, subject to all the regulations that follow securities into the secondary market? Or are they something else? A commodity? A currency? When do they change into something new? When the environment is minimally functional? What if its developers make substantial upgrades to its functionality such that the value of the coins increases with the increased access to the new functionality? These are tough questions that still need answers. They are questions that turn on facts and circumstances, but we should strive to provide some guidance.”
Weighing both sides of the argument evenly she said those market players who are not using ICOs as way to make easy money should meet regulators first and explain their stance.
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