Daily Management Review

SEC Commissioner proposes to introduce regulatory holidays for blockchain companies


Start-ups that attract financing through ICOs have to have three-years long holidays from regulation. Regulators are supposed to use this term to decide whether certain tokens belong to the category of securities. The companies will need to demonstrate that they are really creating open source networks, as well as provide relevant reports.

This was proposed by the Special Commissioner of the US SEC Hester Peirce. “The evaluation of whether the offered or sold token is a security is not fixed and not finite for a digital asset,” the proposal reads.

Essentially, a token may possess the features of a security at the initial coin offer (ICO), but later develop to a point when it no longer falls under the corresponding category. The most telling examples are EOS and Ethereum, Peirce said at Chicago conference.

This proposal was declared after SEC's repeated statements that tokens are securities and, thus, they must comply the general requirements for traditional securities sales.

If other SEC commissioners support the proposal, a strict set of rules for ICOs willl be created. The list is expected to include requirements for disclosing information about project participants and a number of other factors.

source: coindesk.com