US SEC - "Digital Coin Offerings are subject to Securities Laws"

On Tuesday, the US SEC - Securities Exchange Commission, stated that ICOs "should" be subject to the same safeguards required in traditional securities sales.

What does this mean for Investors?

In the shorter term, this will likely push companies that are looking to ICO "offshore." Companies will issue tokens/coins to non-US based investors and still raise capital as they have been in recent months. For an investor, you would likely not be able to participate in ICOs however, like the IPO market in the US, you can acquire token/coin on an exchange once it is trading.

What does this mean for Issuers?

Issuers are likely to only issue token/coin to non-US based investors in the short term so as to not worry about aligning their ICO with US based IPO rules. If you have a company that aligns its ICO with IPO rules/guidelines, you can be assured that the company is at least appearing to have more legitimacy than others who refuse to comply.

Does this mean that only ICOs that are aligned with IPO rules are good/safe investments?

No.

Any ICO can be a scam, poor investment, poor idea, etc. Aligning with US IPO rules would give an ICO an air of legitimacy however, the project can still be horrendous and fail.

Why does this matter?

When the US Regulators get involved in any process, they are trying to bring investor protection to the forefront. Retail investors should always do massive amounts of research before entering into any investment and this is even more true in the crypto/ICO space as the coins and companies are highly volatile.

This signalling from the SEC could mean that they are warning companies doing ICOs that they are in the SEC's cross-hairs so while they arent in the space now, at any moment they can pull the trigger.

EoY Calls

BTC - 5000

ETH - 500

LTC - 100

I hope you enjoy my morning thoughts and find them useful. These obviously are my own views and opinions and should not be taken as investment advice. Your own analysis and diligence is encouraged.

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