Preston Byrne, an Attorney at the ASI and the Founder of Monax, gave his insight on the U.S Securities and Exchanges [SEC]’s crack down on ICOs, in an interview with CNBC Crypto Trader.
Recently, the SEC struck down two ICOs, right after scrutinizing the Founder of EtherDelta, an exchange platform for Ethereum based tokens. The companies that were at the gun point were Paragon Inc., and CarrierEQ Inc [Airfox]. The commission slammed a fine of $250,000 on both the start-ups and has stated that they will be required to payback investors who were harmed for taking part in the ICO. This was the result of not registering as securities with the SEC before conducting the ICO last year.
Preston Byrne started off by saying that the cryptocurrency space has been waiting for clarity on basic questions from the SEC’s side for a long time. He added that one of the topics the investors sought for clarity was related to ICOs, their classification. This is mainly because they were frequently encountered in the wild in 2016 and 2017. He said:
“Until recently we didn’t have any guidance on that point and so now what we’ve seen is that they’re taking a very conservative and traditional approach to regulating these schemes much in line with the way that they’re regulated kind of wacky crazy schemes in the 1970s and that for all intents and purposes these schemes have to either be registered as securities or they have to be exempt from the registration requirement”
Byrne went on to say that because of this, it is not going to be easy to launch a coin in the United States. Nonetheless, this is not the only option for the cryptocurrency world, there are several other countries in the world where the coin can be launched, he added.
The Attorney said:
“We do have very specific rules regarding the sale and dealing in securities within our borders and so hitherto it was thought that if you were going to sell ICO tokens in the US, it might not be subject to those rules but because it’s subject to those rules you can expect that there’s increased friction and increased amounts of compliance and therefore increased cost associated with doing ICO deals in the United States.”
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