The President and Chief Legal Officer of Blockchain, Marco Santori, talked about the new framework that the U.S. Securities and Exchange Commission (SEC) released about Initial Coin Offerings (ICOs) and cryptocurrencies. The main intention behind this announcement made by the SEC was to improve the legal framework regarding ICOs and digital assets.
SEC Didn’t Provide New Information
During an interview with Laura Shin for the Unchained Podcast, Mr. Santori talked about the SEC and its new ICO framework. The interview started talking about the things that are now clear with the new framework released by the SEC. Santori explained that although the commission was able to make some things clear, there are some things that remain without a clear explanation.
Santori said that we were able to learn some things from these guidelines, but just a bit. Santori has also stated that the commission only summarised the previous stance on the Howey Test and that there are some things that remain unanswered to crypto entrepreneurs.
About it, he commented:
“So, the SEC put much of that in writing, adding some, removing some of the bits, but they did a little more than that. They also gave fact pattern at the very end; so, look here’s one fact pattern that we know at least for sure that within this sort of circumscribed set of facts, this thing would not be a security in our minds.”
At the same time, Santori mentioned that the SEC has stressed on Director Himan’s speech in which he discussed the legal status of tokens. They also explained that it is possible for tokens to shift from being a security and became a non-security. This is the case of Ethereum (ETH) that started as an ICO and that was able to become decentralized and avoid being considered a security in the market. Nonetheless, the space is waiting for an answer about what the SEC considers a security or not in the crypto market.
There have been several ICOs that had to give their funds back to investors after being considered securities. These projects had also to pay fines to the SEC for selling unregistered securities.