Initial Coin Offerings "May Be" Securities
Offerings
This week the U.S. Securities and Exchange Commission (SEC)
published an investigative report1 confirming
what many in the blockchain industry had long anticipated:
depending on the facts, the offer and sale of blockchain tokens
pursuant to an initial coin offering (ICO) "may be"
subject to U.S. securities laws. In particular, the SEC identified
the ICO of the Decentralized Autonomous Organization (known as The
DAO), which had raised upwards of US$150 million in May 2016, as a
securities offering that was not compliant with U.S. securities
laws.
Although ultimately the SEC decided not to pursue charges
against any of the promoters of The DAO, the SEC published its
report to caution those using distributed ledger or
blockchain-enabled means for capital raising to consider whether
the tokens or coins they propose to sell are securities and, if so,
to take appropriate steps to comply with U.S. securities
