Here at securities.io, we believe that regulated, digital securities will play an important role in the continued development of the blockchain industry. Actions taken on behalf of the SEC have further cemented our stance. In weeks past, we have been greeted with news of the SEC targeting decentralized exchanges, as well as laying various charges on multiple ICOs.
While most are still looking for updated regulations to be developed by governing bodies within the United States, the SEC has failed to provide this. They have, however, remained steadfast that until something changes, those participating in crowd-sales must adhere to current guidelines.
New Statement. Old Message.
While the SEC has issued multiple statements in the past, touching on the issue, they have recently released a thorough commentary on recent events. This press release can be found HERE. While their statement touches on a variety of topics pertaining to both the issuance, and trading of digital securities, they close with strong words. They state that in conclusion, “The Divisions encourage and support innovation and the application of beneficial technologies in our securities markets. However, the Divisions recommend that those employing new technologies consult with legal counsel concerning the application of the federal securities laws and contact Commission staff, as necessary, for assistance.”
Simply put, ‘feel free to be forward thinking, just don’t do anything unless we say you can.’
Beyond news of the EtherDelta founder being charged, along with the organizer of multiple United States based ICOs, the SEC has, in recent days, settled charges with two other projects.
These projects were AirFox and Paragon Coin. What makes this settlement noteworthy is that each of the companies have been ordered to refund ICO participants their contributions. In addition to this, each company was fined $250,000, and must henceforth register and adhere to current securities regulations.
With this precedent being set, dark times may be ahead for many other projects that are in the SEC’s bad book. Due to the drastic decline seen in overall crypto markets, companies do not have the same worth as when they first raised their funds. This means that if a company raised $50 million during the peak of the market, they will be forced to refund $50 million. Due to the market decline, their assets may total significantly less than this total, however – potentially forcing bankruptcy.
While this has not occurred yet, it is a real possibility for many projects. In the meantime, due to uncertainty within the market, and the actions of the SEC, there is an exodus of innovation from the United States. Promising projects that would otherwise be happy to set up shop within the United States, are choosing to do so elsewhere: In nations with a warmer stance towards innovation – despite the SEC’s claims of open arms.
A Bright Future Remains
All of these actions only stress the need and importance of the various platforms and projects that we report on regularly. Although the topic of non-compliance is hot right now, in the future it shouldn’t be a talking point. Projects like Securitize, Harbor, Polymath, Tokeny, etc, have all recognized this, and are working with fervor to assure a bright future.