Classify all ICOs as securities, obligate
In comes the SEC and rightly so,
wanting to regulate and protect in-
vestors who are being taken to the
cleaners. Said investors cannot even
come together and file a class action
lawsuit as more often than not, the
defrauders have disappeared in a KYC, AML and risk disclosures, force
cloud of anonymity and secrecy ne-
ver to be found or heard of again. wer required, business as usual, pro-
sale to accredited investors only and
voilá:
you have a new class of security that
when traded and having generated ca-
pital gains will be taxed at 30 %! Quite
the perfect outcome: no more manpo-
tection of investors and tax collection!
Now when such rules are in place most
of the exchanges as they exist presen-
For the SEC, this new state of affairs is bad
as they do not know from what end to ap-
proach the entire situation, not compre-
hending at all Blockchain, crypto, etc.
The only way left to do their job protecting
the American investors is to regulate and
stop the savage ICOs taking place in the
hundreds every day the world over.
The easiest way to regulate is to classify all
ICOs as security tokens:
Do you have a market value? (YES)
Can the value appreciate and or fluctuate?
(YES)
Then you are a security token, as people
can make profits while trading your token.
This simple approach alleviates a series of
problems for the SEC ranging from how
to regulate, what to regulate, what is and
what is not a security or utility token.
tly will cease to exist as they will not be
allowed to trade securities unless they
are licensed to trade securities and to
act as an Exchange! Needless to say
many will not qualify and investors
the world over will have problems co-
nverting their coins in cash! A series
of lawsuits can be expected for these
investors who will lose money this
way and not be able to sell their coins.
Most of the companies that have run
an ICO will have to reclassify as se-
curities and take all actions as if they
were publicly listed and 90 % of them
will fail. There will no longer be any
more ICOs for a majority of these
companies.
Megaphone