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New ICO Regulations to Come?

November 2, 2018


The regulation of securities in the United States is about to go beyond the Securities Act of 1933 and the Howey Test.


According to an article today by Coin Desk, we still need to consider the possibility of Ethereum and therefore ERC-20 tokens, being retroactively considered as securities. To understand this, it is important of course, to begin by understanding the writer’s, thoughts on the subject including what decisions he cited in making his conclusions. Primarily, he attempted to point out that what officials from the SEC say publicly is different from an official, published SEC decision on the subject. In other words, they can personally believe matters are one way and then act in another way, based on what the commission decides as a whole.


What is most urgent about all of this, however, goes beyond Ethereum.


We have no clear framework for regulating ICOs as of yet, do we?


I ask this as a question due to one specific reason. While attending the Malta Blockchain Summit and networking with several industry insiders including experienced financial consultants who have moved to the Blockchain, a possibility was raised. Perhaps security token offerings are the natural evolution of ICOs. Perhaps, instead of governments working so hard to try to develop entirely new laws for the regulation of this funding model, we should treat it more like an Initial Public Offering.


Doing so, however, is not without its own problems. Rising above the rest is the obvious case in which doing so would cause the majority of the industry to fail almost instantly. Not only are some established Blockchain firms against security tokens altogether due to their apparent ties to centralization, Bitcoin was built on the foundational idea of the benefits of a decentralized network. Due to this and this alone, it appears that we are, in fact, not at the point in which ICO regulations are anywhere close to fruition in a lasting fashion. To achieve this, we just might need to consider mixing considerations related to decentralization and the protection of investors.



By: BGN Editorial Staff

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