Andreessen Horowitz and Union Square asked SEC for exemptions for crypto tokens

19 April 2018

The U.S. Securities and Exchange Commission held a private meeting in March this year with the prominent cryptocurrency market investors Andreessen Horowitz and Union Square Ventures, according to the report published by the Wall Street Journal. The panel discussion touched the issues of exempting blockchain tokens from the monitoring activity of the regulator.

The venture capital firms talking to senior officials from the Division of Corporate Finance of the SEC, put forth their opinion on the excessive regulation on the part of the agency, noting that it could negate the innovation in the blockchain industry and insisted on treating crypto tokens as something not related to the investment, and, hence, as securities. The firms stated that tokens represent a means of getting access to blockchain services and networks, emphasizing thus their use as ‘utility tokens’.

Meantime, the investor firms expressed no objection against the regulation on the part of the SEC in explicit cases of fraud.

Meantime, the report in the WSJ cited some sources saying that the SEC officials would unlikely provide such an exemption. Instead, the SEC may make concessions only to the extent of a limited exemption, provided that the companies agree to restrict participation of individual investors in the ICOs and to close the door for reselling tokens at higher prices to other parties.

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