Daily Management Review

SEC: ICO tokens are securities, but Bitcoin is not


06/08/2018


The head of the US Securities and Exchange Commission, Jay Clayton, clarified the agency's position on the classification of the crypto currency, saying that tokens produced through the ICO are securities, but Bitcoin and similar coins are not. He also noted that the SEC is not going to change its point of view on this issue, CNBC reports.



Marco Verch via flickr
Marco Verch via flickr
The head of the US Securities and Exchange Commission (SEC), Jay Clayton, said that Bitcoin is not a security, and contrasted it with traditional money. "Bitcoin can replace the dollar, yen or euro, so we cannot classify it as securities," he said.

According to Clayton, tokens can be referred to securities, as they fulfill the role of digital assets and the US financial controller controls this area. "If I give you money, and you create an enterprise and grant me with the right to a share of the joint capital, then we are talking about securities." The SEC regulates offers of such securities and trades in them," he commented.

"We will not misinterpret the traditional definition of a security that has existed for a long time," Clayton said. "We have been doing this for a long time and do not see the need to change the concept."

In addition, the SEC is not going to change the rules for the ICO, and even will "happily help to carry out public sales" if their issuer follows all established requirements, Clayton said. "If you have an ICO or share and want to sell them privately, follow the rules for conducting private campaigns," he added. "If you want an IPO for your token, contact us."

In 2017, the regulator opened a specialized cyber-unit, engaged in combating crime in the field of fintech and the Internet. Since its inception, the SEC's cyber division has watching ICOs as one of the most dangerous and big threats for potential investors. Some time ago, the SEC created a page that mimicked one of the fraudulent ICO campaigns in order to show investors the most obvious signs of misconceptions.

ICO is a popular but still unregulated method of attracting financing, which, according to the SEC, allowed start-ups to raise $ 12 billion from the beginning of 2018. Also ICO have become a favorite tool of scammers who cheat investors, luring them with promises of high yield.

The fake project HoweyCoin proposes to make an investment in the luxury travel market and receive a 25% discount on the rights of a "golden" membership. The HoweyCoin landing page has the characteristics of some completely standard ICO campaigns. The website even provides a link to a 9-page white paper and a list of celebrities allegedly supporting HoweyCoin.

The SEC report notes that white paper contains "a complex, very vague description of why investors should invest their money, as well as promises of guaranteed profit and a countdown timer, after which visitors will miss the best offer in their life."

The name of HoweyCoin for its fake campaign was chosen by the SEC not casually. It is a reference to the Howie test, developed in 1946 by the US Supreme Court and intended for the classification of investment instruments. Previously, the SEC recommended that exchanges of crypto-currency and crypto-currency start-ups use this test to determine whether their digital token can be recognized as a security.

source: cnbc.com






Science & Technology

Amazon’s Ring gets in a privacy scandal

Facebook Is Creating A Stablecoin For Its WhatsApp Users

IBM offers to use the first quantum computer

Passport Numbers Of 5 Million Customers Hacked: Concedes Marriott

China Lifts Approval Freeze On New Video Games Launch

Concentrated Solar Plant System To Dispatch Electricity To The Grid On Demand

Unique Underground Transportation Tunnel Revealed By Elon Musk

Toyota is trying to revive demand for Prius

Deloitte: Smart speakers will show record sales in 2019

China takes the lead in quantum cryptography

World Politics

World & Politics

Macedonia ignites political crisis in Greece

Brazil turns right

Merkel’s Pledge Of A United Germany in 2019

Murder Suspects Of Jamal Khashoggi Put On Trial By Saudi Arabia

Japan is trying to save its population with robots and migrants

Germany closes the last coal mine

US launches investigation against Airbus

European regions with the most polluted air