The SEC said today that some initial coin offerings (ICOs) may qualify as securities sales – a move that while expansive in impact, wasn't that surprising to legal and regulatory observers in the space.
As CoinDesk reported earlier today, the US agency revealed that it has completed an investigation into the creation and subsequent collapse of The DAO, the ethereum-based, smart contract-powered funding vehicle that fell apart following a devastating code exploit last summer. Ultimately, it did not take action against those behind the project.
Still, as part of its review, the SEC found that tokens issued in conjunction with the project were captured under its definition for securities, and it notably said that other tokens sold by way of an ICO fundraising model could receive a similar qualification as well.
Reaction to the finding was swift.
Washington, DC-based lawyer Stephen Palley told CoinDesk that the agency's release "confirms that securities laws don't stop at computer keyboard", but that it was "frankly, not a huge surprise."
Palley went on to speak to the uncertainty in the SEC's statements – namely, its lack of determination on which blockchain tokens qualify as securities and which do not.
He told CoinDesk:
"What remains unclear is how the SEC will view many other token sales that have since taken place in the US, directed by US citizens. Those that have adopted creative workarounds to address securities laws may be wondering if their approach was sound."
To read the full story: 'Not a Surprise': Blockchain Industry Saw SEC ICO Action Coming