US regulator, SEC has taken the first step to check the new trend money raising by start-ups- through Initial coin offerings (ICO). You can read our other post – What is ICO?
The regulator conducted an internal investigation and concluded that some of the virtual currencies (tokens) sold to investors should be categorised as “securities” and need to follow US securities regulations. Currently, there is no regulatory oversight on ICOs.
Since the start of the year, startups have raised more than USD 1.30 billion through tokens / ICOs without any regulatory oversight. Many experts have accused the ICO market as bubble where 100s of ICOs are being launched to get investor’s money.
In its report, SEC has now concluded that initial coin offerings (ICOs) must comply with US securities laws, just as if they were issuing shares or stocks, unless they can find a valid exemption.
Let’s see how the ICOs reach to this warning…
25th July 2017 SEC Link