In a recent CNBC interview, Jay Clayton, the Chairman of the US Securities and Exchange Commission (SEC), maintained the watchdog’s stance on ICOs while remaining tight-lipped about the future of Exchange-Traded Funds (ETFs).
“We’ve had no ICOs registered” was his response to a question posed by the show’s presenters on deals made with two ICOs, Airfox and Paragon. He further added, “To the extent that an ICO is being conducted offshore or pursuant to a private placement exemption, fine; to the extent that you’ve conducted a public offering in an ICO, it’s non-compliant.”
The SEC, along with the Commodities and Futures Trading Commission (CFTC) of the US, have ruled that specific cryptocurrencies such as Bitcoin are not securities since they do not offer any stake in the business or offer future returns to investors. ICOs, however, can be securities and each one has to be considered individually to ensure the tokens are securities or not. “I think we’ve been clear that Bitcoin isn’t a security, but many of the ICOs that you see and talk about – they are securities,” Clayton said.
Even on other issues, such as Bitcoin ETFs, the chairman evaded answers and stressed the SEC’s existing stance, “I’m not going to comment on timing or anything like that, but we’ve been clear on some of the issues that are of concern to us.”
The questions stemmed from the fact that SEC had ordered Paragon and Airfox to return the millions of dollars it had gathered from investors and then further pay fines the regulators placed on both platforms on violating regulations. The platforms’ tokens came under the classification of securities and were found guilty on account of selling the said securities without proper licensing.
Airfox and Paragon had raised a combined USD 27 million from their ICOs last year.
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