The US House of Representatives and the Securities and Exchange Commission (SEC) in a hearing on Thursday debated the approach to regulating Initial Coin Offerings (ICOs). A “balanced approach”, and a ban and were mentioned. The hearing was titled ‘Oversight of the SEC’s Division of Corporation Finance’ and it sought amongst other things to determine how ICOs can affect IPOs.
The director, Division of Corporation Finance of the Securities and Exchange Commission William Hinman addressed the Capital Markets, Securities, and Investment Subcommittee of the House’s Financial Services Committee. In his address, Mr. Himman said his division as part of the SEC is "striving for a balanced approach" in regulating Initial Coin Offerings and cryptocurrencies.
Congressman Brad Sherman (D-Calif), responding to the address called for the ban of ICOs entirely stating that the ICOs or token sales were not good for the US economy. Comparing ICOs with conventional Initial Public Offerings (IPOs), Sherman painted ICOs in a bad light. According to him, "The reason for securities markets is to provide jobs in the real economy,” he said arguing that an IPO provides these jobs while the ICO on the other hand cost jobs. "An IPO does that; an ICO does the opposite. It takes money out of the real economy." Sherman argued.
He said a balanced approach the government executive mentioned should be a balance between creating jobs and protecting investors. He further argued that ICOs which according to him, did not jobs did not provide protection investors either.
In response, Hinman said, "Some folks are finding that the ICO instrument allows for a different type of enterprise, one that's more decentralized, and which they think has some value."
Addressing other questions that came during the session, Himman said that it wasn’t common to have an initial coin sale without having a securities offering, although there might be a case of “a token where the holder is buying it for its utility and not as an investment,"
Before the grilling, Sherman in his introduction declares that bitcoins were securities since they were investments. This is in contrast with the views of SEC’s chairman, Jay Clayton who sees ICO tokens as securities but not bitcoin. "When you depart from the bitcoin or the ethereum, and you get into the tokens, the hallmarks become pretty clear," he said in November.
Posted from my blog with SteemPress : https://smartereum.com/11475/us-house-committee-grills-sec-official-of-over-balanced-approach-to-ico-regulation/