The US Securities and Exchange Commission has started paying attention to ICOs and they're ready to come after YOU if you don't follow rules that were created to regulate stocks and other securities during the Great Depression. So what do you need to know?
Your first option is to look into the regulatory environments around the world and potentially pick up and move to to places like Switzerland or Singapore, but if you want to make it a go of it in the US, it comes down to very narrow definitions of:
- Security vs.
- Utility********* This is the KEY!
Yes, UTILITY! Can the tokens/coins be used for something!
Good Example: Tokens are created for a new ride sharing platform. The ICO allows you to buy coins that you can later spend on rides (instead of paying with dollars or other world currencies).
Bad Example: Investors in an ICO are promised a dividend based on the performance of the company, app, coin, etc. -- DO NOT PAY DIVIDENDS. This is the first practice that the SEC has specifically come out against.
The rush of blockchain companies out of the US to countries with more lax regulatory environments will likely spur debate and hopefully better guidance from the regulatory community, but in the meantime, this is one area that forgiveness will not be granted.
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