The authorities of the SEC, better known as the U.S. Security and Exchange Commission, as is well-known, recognized the initial public offering of the so-called tokens (or cryptocurrency, or ICO) as an equal, conventional offering of a company asset and business, stock. This commission isn’t the only authority internationally to recognize the fact of the information shown above.

This market regulator, among other things, released information regarding how market participants can evaluate the US laws that regulate operations relating to securities, on par with those related to cryptocurrencies. The new procedure stipulates that regardless of if the issuer is a decentralized, independent organization or a traditional finance company, as well as in situations when asset acquisitions are made in US dollars or cryptocurrency, all these exchanges are obliged to follow the same rules. Likewise, from this point forwards it does not make a difference if they are distributed traditionally or if they are distributed through the use of technology of the distribution registry.

Tokens, ICO, otn, securities, crypto currency

The exchange distribution of cryptocurrencies these days is extremely vibrant. The excitement about them has by no means died down, on the contrary, it has only grown. Therefore, the exchange remains as it always has, namely, a segment of the financial market where you can both earn and lose allot.
Now, these companies that release assets based on blockchain will also be required to register their operations. Those who continue operating without registration will be held criminally liable for their actions by specialized authoritative bodies.
Among other things, the SEC requires those who wish to trade with this type of asset to register at the exchange.

As we all know, $43.9 million crypto “coins” created through blockchain were withdrawn due to an SEC investigative report following the conclusion of an audit of crypto-exchange operations by the DAO (Decentralized Autonomous Organization) project.

The DAO project attracted millions of dollars in the form of ethers, which has, in essence, the same algorithm as bitcoin. The so-called “ethers” are formed using the same blockchain technology. They are widely used on Ethereum’s platform, whose creator is without a doubt one of the most talented young programmers, Vitalik Buterin.

The DAO can practically be considered an exclusive algorithm for venture funds and it is used properly for attracting investment to cryptocurrency start-ups.

The management of these funds if completely automated, they run through a special computer program. All the finer points and principles of how it runs, down to the most common managerial tasks to every day “basic” financial operations and calculations of earnings, are clearly and consciously written into its computer code.
By the way, as recent as 2016 the DAO was hacked. In all, they made off with several million “ethers”, worth around $60 million dollars.

The same DAO collected $107 million dollars to invest in a special project on Ethereum dealing with a type of blockchain.

According to SEC data, despite the fact that the DAO considers itself to be a crowdfunded project, it does not adhere to even the basic requirements for crowdfunding. To start with, the authorities decided against pursuing punitive measures against the DAO, however, they have been official warning publicly relative to all financial exchange participants. According to Stephanie Avakian, the SEC Co-Director of the Division of Enforcement, these measures were absolutely necessary to safeguard the investors themselves, as well as the market as a whole.

Despite the fact that the SEC doesn’t lack legislative power, they heavily influence American exchange activity. Her statement, in turn, brought investors to the realization that they would be deprived of achieving a specific law regulating cryptocurrencies.

The head of the Elina Sidorenko, the head of the interdepartmental working group focusing on concerns related to evaluating the return risks of “crypto coins” in the Russian State Duma. According to Ms. Sidorenko’s statement, the SEC has established new norms. The SEC only highlighted that they have the authority to decide if each of the existing ICOs has the right to issue this or that security and that they will resolve this on a case by case basis.

Ms. Sidorenko believes that, “the legalization of ICOs will cause the vast majority of prospective projects to fail, and the US, who decided upon a path to ICO legalization alone, has set a high bar to register legally, and it, in turn, will be taken into account by the State Duma’s working group.”

The US, having first recognized bitcoin as a payment method, gave LedgerX permission to offer cryptocurrency contracts.

According to Reuters, ICOs, or more accurately, their various investments, have become a literal “gold mine”, which has opened up new opportunities for participants to conduct an array of different operations with cryptocurrencies.

Participants received directly the incredible opportunity to quickly accrue millions through selling cryptocurrencies, while they remained under the authorities’ radar.
According to a report that cites Smith + Crown research data, already by summer 2017, tech firms raised about $1.1 billion in 89 ICOs, roughly ten times greater than that of the previous year.

Cryptocurrencies have established a fundamentally new method of attracting investment.

According to a statement made by Preston Byrne, a technology attorney for Reuters, “This is a shot across the bow for many of these ICOs”.
Russian authorities, intrigued by blockchain, are partly interested in the direction of growth in this sector on the financial market.

In particular, Mike Lobanov, General Partner at Target Global, who invested in the London crypto exchange CryptoFacilities, thinks that the SEC came to the right conclusion, saying that the current ICO market is the new “Wild West”. According to his opinion, at the moment ICO projects are created that attract massive investments, however, in all actuality they are worthless. The SEC can soundly argue that, regardless of if financiers consider the securities’ distribution process of ICOs or IPOs, the requirements for both will be completely equal.

In terms of what will happen to those who funnel funds into an ICO, the SEC makes clear to any US investors that it isn’t worth it to be tempted unless you want to run into legal problems with US authorities.

In Russia, the ICO exchange is not so pronounced.

In accordance with the laws of the Russian Federation, securities are recognized through legal documentation, which strictly adheres to the set requirements. This position isn’t without its supporters, who are convinced that cryptocurrency releases should be equated with the production or issuing of securities.
Those opposed are convinced that bitcoin shouldn’t mandatory rights and can’t be a financial obligation. Based on the assumption that cryptocurrency transactions are no better than bartering. Therefore, it makes no sense to regulate cryptocurrencies like securities, prior to enacting a law that makes blockchain shareholders just as legally liable as traditional shareholders.

The SEC report also “centralizes” the exchange, however, this will decimate nearly all the attraction of ICOs in the first place.

Lawmakers “hit the brakes”, aiming to protect masses of amateur investors. However, it is possible that the new legal norms will be developed further, making the legislative norms friendlier to investors as well as participants.


“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”

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