The Commission on securities and stock exchanges of the USA, followed by educational fake ICO published on its official website manual for investors interested in ICO projects.
In the past two years, thanks to the hype around blockchain technology, various ICO, in the aggregate, could involve billions of dollars. However, with the growth of popularity for ICO-campaigns were characterized by incompetence of the organizers, the fraudulent tricks of promoters, and as a result, defrauded investors.
Financial regulators worldwide found that the method of raising funds through the ICO is not easy to enter into the legal field, and authorities in many countries still are unable to give a precise definition of the initial placement of the coins.
In the case where the tokens represent something resembling the company’s shares, they are treated as securities and fall under the relevant legislation. In the US the tokens-the securities are under the jurisdiction of the Commission on securities and exchange Commission (SEC).
Despite the fact that tokens are securities governed by U.S. law on securities 1933-1934gg, the public should be informed about the risks associated with the ICO and also have a guide to making decisions about investing in ICO projects, said the SEC. That is why the Commission has created a guide for investors and published it on the official website of the Department.
ICO is not about reading/writing withpaper and not about arithmetic. ICO is about the risks, benefits and responsibility.
The SEC explains:
— ICO, distribute securities are required to register with the SEC.
— Not all tokens are securities, but some of them cleverly disguised as such.
— Participation in ICO high-risk investment.
Addressing the investors, SEC says:
— Cryptohalite, by their nature, have no boundaries, so the protection that You can provide the local regulatory authority is often quite limited.
Investors must be extremely cautious and conduct a thorough independent study of the project considered as investment opportunities. Necessary to analyze the business model of the ICO, and also behind the creation of the technology team to evaluate regulatory status and feasibility of the project.
Issuers ICO Commission on securities and stock exchanges of the USA indicates that it is necessary to realize the responsibility for selection of the financing option and ensure safety. This statement equally applies to the companies providing the platform for holding the ICO and the subsequent output tokens on the exchange.
A few weeks ago the SEC for educational purposes provided the public website page of a typical fraudulent ICO to demonstrate to investors, in practice, how not to fall for tricks fraudsters.
Earlier, the SEC adopted the position of Advisor on cryptocurrency and appointed to the post Valerie Sepanik, which will head the process of adaptation and development of the securities laws to the sphere of “technology and digital currencies”.
The head of the Commission on securities and stock exchanges of the USA Jay Clayton stated that bitcoin does not apply to securities, but it can be used as a replacement for government currencies such as the dollar, yen or Euro.