We have been hearing for some time now that past issuers of initial coin offerings (ICOs) have been receiving subpoenas from the Securities and Exchange Commission (SEC). This should come as no surprise to anyone as the SEC has been messaging their concern regarding ICOs quite publicly for some time now. To be more specific, SEC Chair Jay Clayton has been cautioning issuers AND industry facilitators that ICOs are securities and the majority are breaking the law as they have not filed for an appropriate exemption. At SEC Speaks this past week, it has been widely reported the SEC said many ICO investigations are under way.
The very first shot across the bow by the Feds came with the DAO report back in July of 2017. The ICO industry paused for about a minute, or two, and then regained its velocity with vigor. There is a lot of talk about who will dodge an enforcement action and who will not. To date, much of the enforcement actions taken against token issuers has targeted clear cases of fraud. Now that will change. Any post DAO Report US based ICO is now at risk.
Any US based ICO issuer that is not filing for an exemption is playing with a loaded gun. Global offerings have been migrating away from solicitingn US investors for awhile as the industry has adjusted to the changing legal posture of regulators. And don’t forget cryptocurrency exchanges …
We have also heard that some securities attorneys may be caught up in any enforcement action. As one person said, “things are going down.”
Developing…