According to Robert Jackson, a member of the United States Securities and Exchange Commission (SEC), the Commission is not planning on banning the initial coin offerings (ICOs). Jackson gave an interview to CNBC where he talked about this topic.
Jackson’s stance in the interview is coherent with more flexible stance of the SEC, but at the same time conveys a clear stance of the SEC when it comes to the tokens offered for sale during the ICOs. The SEC considers these tokens to be securities and as such should be treated by all the corresponding legislations. Jackson said: “Investors are having a hard time telling the difference between investments and fraud. Down the road, I think we will be thinking about ways to make those investments work consistent with our securities laws.”
Jackson also put emphasis on the lack of clear regulations for establishing order on the ICO market, saying the participants in these rounds of financing of the startups have been acting effectively as if there were no regulations. According to Jackson, this brought a lot of damage to the investors: “If you want to know what our markets would look like with no securities regulation, what it would look like if the SEC didn’t do its job? The answer is the ICO market. Right now we are focused on protecting investors who are getting hurt in this market.”
The SEC has maintained a vigilant stance towards the initial coin offerings until now and it has been issuing warnings repeatedly about the risks associated with this type of activities, but the stance expressed by Robert Jackson might present a certain opening of part of the SEC to the ICOs. At the beginning of last month, Jay Clayton, the Chairman of the SEC, said that not all the ICOs were fraudulent. Moreover, the Director of the Division for Corporate Finance of the SEC, William Hinman, said the commission was fighting for a more balanced approach when it comes to the initial coin offerings.
It is worth mentioning that the cryptocurrency market is rising and this will probably stimulate new ICOs. After Bitcoin reached its lowest price in 2018 at the beginning of April (around 6,900 dollars per coin), with the rest of the cryptocurrencies following, the market seems to be recovering and especially Bitcoin whose price went over 10,000 dollars again. Now, the startups have a more vigilant SEC in front of them and should be more careful when it comes to raising funds.