Whether to restrict to ICO frames of the traditional legislation on securities?
In the article of February 8 in issuing of “CoinDesk” of Julio Faur from Santander assumes that “the official token (utility token) is a bad idea” because would be “self-deception” to assume that primary layout of coins (ICO) cannot be read a direct analog of the sale of securities.
According to Faur, it is rather “we shall work jointly on a framework for the creation of accurately certain diagram for ICO which would allow from the very beginning, to recognize them as securities”. This diagram “process for ICO it shall be developed in cooperation with regulators for the purpose of compliance with the law about securities”.
And Faura is not lonely in the beliefs. In the report of February 5, the head of the department of investment researches of the Goldman Sachs company assumed that ICO investors can lose all the investments that are connected to the fundamental provision Faura that ICO shall be regulated “for the purpose of protection of investors”.
In the report of February 5, the director of global development of the Goldman Sachs company, assumes that the investors investing money in ICO have not zero chances to lose all the investments and it has also something in common with the fundamental provision Faura that ICO shall be regulated for the purpose of “protection of investors”.
It is not really clear how the hybrid solution proposed by it can be realized as it requires individual share in the market and regulators, therefore, they will not take a part in the course of ICO start.
For what reason the existing financial institutions and regulators will avoid the use of the existing methods of the attraction of the capital or try to restrict to ICO frames of the traditional legislation on securities even if they consider ICO as the sale of securities?
Response: They will also not be. “Ripple” — the company which is partially financed by Santander InnoVentures fund suggests to glance at how traditional banks and the financial markets can compete using blockchain technology and “tokens”.
In the expressions, Faura colors all ICO in one color, saying that each ICO actually issues securities which shall be subject to review in the Commission of the USA on securities and the exchanges (SEC). Actually, it not so.
And it is valid, Faura does not surprise why representatives of SEC did not come to Ripple (XRP)? Especially taking into account that official ICO was not carried out, and at the same time was disputable the token which bargains at 18 exchanges now was released. Though probably after attraction of nearly 94 million US dollars of the venture capital, Ripple also does not need carrying out ICO.
ICO “protected” by Perkins Coie law firm which was followed by the release of the official token (utility token) was one more ICO ignored by SEC. This token in three minutes attracted deposits for 35 million US dollars. The token of Brave creates the digital advertising ecosystem bound to the attention of customers — therefore it is called a token of Basic Attention Token (BAT). It is expected that this will grow rather present digital circuit of the advertising bound to the web ecosystem created in 1995.
Many say that SEC and other regulators practice very weighed approach in this area at present, first of all, directing efforts to obvious swindlers to constrain those who did not decide on crime yet, and, at the same time, allowing technology to develop in the habitat. Therefore it is no wonder that the claim request can serve good service when SEC does not react. And recent indicators, it seems, confirm this interpretation SEC line item concerning the ICO procedure.
On February 6 the chairman of SEC Jay Clayton at a meeting of Senate banking committee recognized that the potential received when using blockchain technology “is considerable”. His co-chairman, the head of the Commission on trade in commodity futures Christoffer Giancarlo, came so far that told that for the enterprises based on blockchain technologies, there is “a huge potential” which “seems absolutely extraordinary”.
Nevertheless, during the indications, the chairman Clayton told that SEC will continue “to fight seriously” against fraud and manipulations for ICO offering securities with limited circulation. What will be coordinated with the previous messages, considering that on December 11 chairman Clayton asked that the Confidential Department of SEC applied “more vigorously” and recommended actions against ICO which can be involved in violation federal laws on securities?
Chairman Clayton said that SEC “actively works”, in the fight against ICO, but preferred not to answer the question asked by Senator Mark Warner from Virginia namely: “SEC will return and will check earlier carried out ICO”.
In other words, there can be some ICO, similarly carried out for BAT which SEC will not attack, despite Clayton’s statement made during listenings that “each ICO which I saw is security”.
The perspective of the fact that some ICO hundreds of millions of dollars which are carried out in 2017 and collected, SEC will not be considered gives accurate “understanding” that not all ICO get under SEC monitoring.
As well as in a case with XRP and BAT, in the future, most likely, many other tokens, initiatives, constructed on disruptive for blockchain technology, which will allow avoiding SEC checks, especially will be released if they are not perceived as securities.
The fact that SEC does not pay the attention to them, despite check concerning Munchee Inc yet. which was begun several weeks later after placement of coins of Munchee MUN. It signals that SEC will soften the activities for ensuring compliance with the legislation when faces disruptive initiatives for blockchain technology which generates the true intrinsic value. In other words, the official tokens (utility token), from this point of view, can be a good idea.