SEC chairman clarifies how the agency will regulate ICOs

6 June 2018

During the talk with CNBC this week, Jay Clayton, a chairman of the U.S. Securities and Exchange Commission, noted that startups launching the sales of cryptocurrency tokens should comply with the legislation.

He noted that the companies having intent to sell a token or a stock in a private placement, such business should follow the private placement rules, and if a startup wants to hold an IPO with the token sales, such startup should consult the SEC and the Commission will provide assistance in arranging this public offering.

Clayton provided clarification on the parameters and indicators that the regulator would be taking into account, when deciding whether to classify a token as a security instrument subject to security market regulation.

He said that if a token or a digital asset is offered in a way, where an investor is promised a return on the investment, this token will be viewed as a security, and the Commission’s rules will, hence, be applicable to it, meaning that it will regulate this security and the trading process.

Bob Pisani from CNBC asked Clayton, if the regulator has future plans to provide a detailed statement on the token regulation, and Clayton said that he just did it.

Comments provided by the Commission’s chairman come after the appointment of Valerie Szczepanik for the position of the agency’s Associate Director of the Division of Corporation Finance and Senior Advisor for Digital Assets and Innovation for the division’s acting director Bill Hinman. In the official statement made by the regulator, it was explained that she will be responsible for the coordination of all SEC divisions and offices with respect to the applicability of U.S. securities laws and policies to digital asset technologies, including ICOs and cryptocurrencies.

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