The SEC Restates its ICO Guide and Commits to Formalize the Sector

In a tweet published by the Securities and Exchange Commission (SEC) on February 10, they reiterated guidelines on initial coin offerings (ICOs) and committed to standardize the sector.

A detailed section can be found on the agency's website where lists five aspects the SEC considers critical to ICOs, as well as a separate section for investors and market professionals.

The five descriptive aspects summarize its current views on ICOs, including that tokens issued in an ICO should be registered with the SEC as a security. So far, the SEC has cracked down on a handful of ICOs, brokers, funds and even one exchange, imposing fines for their actions as unregistered entities.

The guidelines also makes familiar reference to risks for investors and require them to do their research before making any capital investments.

A summary of the guidelines notes that more and more companies and individuals see ICOs as a way to raise money or participate in investments. “While these digital assets and the technology behind them may present a new and efficient means for carrying out financial transactions, they also bring increased risk of fraud and manipulation because the markets for these assets are less regulated than traditional capital markets.”

SEC chairman Jay Clayton made a series of statements about ICOs during a hearing on cryptocurrencies last week that similarly emphasized the need for investor protection.

However, SEC commissioner Heister Peirce said on February 8 that the delay in establishing regulation could give the industry more leeway.

Image: pexels.com

Author: Max Li

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