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ARTICLE · 09 FEBRUARY 2018

Recent ICO Enforcement Trends

Herbert Smith Freehills Kramer LLP
Herbert Smith Freehills Kramer LLP
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Herbert Smith Freehills Kramer LLP

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The SEC issued an enforcement order in connection with a token offering by Munchee and a public statement that shed some additional light on the SEC's approach to ICO issuances.

United StatesFinance and Banking
Kevin Scanlan
Kevin Scanlan
Hubert De Vauplane
Hubert De Vauplane
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One week after filing a fraud suit against the organizer of the PlexCoin token sale (discussed below), the SEC issued an enforcement order in connection with a token offering by Munchee and a public statement that shed some additional light on the SEC's approach to ICO issuances. The PlexCoin fraud suit and the Munchee enforcement action were initiated by the SEC's recently created cyber unit and reinforce the SEC's ongoing interest in policing ICOs and token sales involving U.S. investors.

As the SEC discussed in the DAO report, tokens, coins or other digital assets issued on a blockchain may be securities under the federal securities laws, and if they are securities, issuers and others who offer or sell them in the United States must register the offering and sale with the SEC or qualify for an exemption from registration. On Dec. 11, 2017, the SEC made this determination with respect to MUN tokens sold by Munchee, a California business that created an app

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