IC Markets

SEC Indicates Digital Coin Offerings to Different Securities Law

US Securities and Exchange CommissionThe SEC or United States Securities and Exchange Commission has determined that the security regulations of the nation would be applicable for ICO or Initial Coin Offerings which is a form of new digital coins issuance.

In a statement, the agency said that the companies that make use of digital assets sale for raising money would not have to adhere to the federal securities laws.

As per Securities and Exchange Commission, ICO issues must register the offer with the required authorities of the government. It further added that the exchanges offering virtual currency trading like ether and “Bitcoin” would now come under its purview.

Stephanie Avakian who is the Coordinator in the Enforcement Division of SEC made the following statement:

The innovative technology behind these virtual transactions does not exempt securities offerings and trading platforms from the regulatory framework designed to protect investors and the integrity of the markets.

In the recent past, some different startup firms have raised tons of money by selling tokens for such sales without the SEC involvement. In the year 2017, the tech companies that deal with virtual currencies have increased approximately $1.1 billion through 89 coin sales by around ten times over the last 12 months according to the data from crypto-currency research firm Smith + Crown. There are approximately 110 ICOs that are scheduled for the remaining of this year as per the website tracking token salestokendat.io.

The observation of the commission came after its investigation into hacked DAO token sale of digital currency “Ethereum. Over a period of 4 weeks, there was a $150 million rise in sales. The agency was assigned to reviewing if DAO token sales violated federal securities laws by having unregulated and unregistered offers for the token in exchange for Ether currency.


Even though SEC has decided not to levy charges in DAO case, but it has given warning to the digital currency industry, and it’s market participants that all cases applied federal securities laws no matter it is a decentralised entity or traditional company.

Jay Clayton who is the Chairman of SEC says that agency encouraged new and innovative ways for raising capital, but the priority was to protect investors and markets. Industry experts are of the opinion that these decisions can have profound repercussions on the market.

Angela Watch who is the Associate Professor at St Mary’s University School of Law says that it is the very first time that SEC has taken the initiative to address the issue of digital currencies and how exchanges fitted in the financial system. It also reminds that natural consumer protection laws were applied in the digital world too.

Steven Rudford

Steven Rudford

Hello, my name is Steven Rudford. Welcome to Top10FX.net. Follow my website for the most trustworthy Forex broker reviews and last minute financial trading news.

IC Markets

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