The Securities and Exchange Commission (SEC) is still concerned about initial coin offerings, but the regulator has no intention of banning ICOs and is optimistic about a legal way to invest in cryptocurrency, according to one of the SEC officials.
“Investors sometimes have a hard time understanding what is an investment and what is a scam,” Commission spokesman Robert Jackson told CNBC.
“We will find a way to make these investments comply with our securities laws,” Jackson said. The SEC representative does not comment on the details of the method, but believes that the Commission will neither prohibit nor permit ICOs. “Our goal now is to protect investors who are suffering from illegal activity in the market,” says Jackson.
ICO is the sale of coins or tokens to raise funds. Instead of voting rights or dividends that come with a company's shares, "protocol tokens" provide access to a network, platform or service, but most often they are backed by an abstract idea or generally empty promises.
The commission warns about pump and dump scams (Pump&Dump) in ICOs and is taking enforcement action against scammers by policing cryptocurrency companies and exchanges.
SEC Commissioner Jay Clayton made it clear during a congressional meeting in February that despite claims that some tokens were “protocol tokens,” every ICO he saw was a security.
Jackson stressed that the market needs regulation and said that the current "crypto madness" is what any market would look like without financial oversight.
“If you want to see what our markets would look like without regulation, if the Commission wasn't doing its job, then look at the ICO market,” suggests Jackson.
The price of bitcoin fell below $10,000 in March when the Commission announced that online platforms trading digital assets must obtain regulatory approval to operate.
Bitcoin's price has fallen 30 percent this year to 9,304 as of Monday, according to CoinDesk data.
According to bc.com/2018/04/30
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