Employees are working on a Bitcoin mining program and even computers in a factory based in Italy. When the Securities Commission released guidelines regarding the companies that sell tokens, it’s safe to say that a lot of people were shocked. That being said, a lot of people in the industry chose to praise the SEC because these new regulations are going to provide people with the clarity that they need. It also shows that the private agency has gone a step too far. A lot of people believe that this is an overt declaration and that it is also a war on cryptocurrency. They believe that the guidance is terrible and that if they don’t say anything nice then they are going to be prosecuted. Now they are facing a lot of backlash and there is no telling how long this is going to last.
The lawyer who issued the above statement has asked not to be named as he fears retaliation. He has also come out to say that the SEC guidelines are not acknowledging how cryptocurrency is different from various other assets. He went on to add that the SEC’s own position will force a lot of other companies to set up their own shop out of the US. The guidelines are also indicating that more investigations are going to be done to try and uncover companies who have sold tokens to the public. This is especially the case when you look at the currency boom in 2017. This period showed a huge number of blatant frauds. The document even stated that a 1946 decision which was a set of rules for defining an investment should also really be taken into consideration too. Of course, the upshot is a huge range of tokens that have been listed as being for sale. These will probably be considered as being securities and this means that they will absolutely have to be listed by the SEC. This is before they can then be offered to the general public. This process is super slow, not to mention that it is also expensive. On the same day that they issued their guidelines, they did choose to bless a company’s plans to offer a range of unregistered tokens. This would be done in response to people joining a club, which would allow them to hire private jets. The SEC said that none of the proceeds from this would be used to fund the building of the network in general, and that they would also not trade outside of the Turnkey platform. In response to this, the law firm known as Cooley published their very own note. This is likened tokens to streetcar tokens. They also observed that the SEC have stated that neither one of these are securities. When you look at what the critics have to say, you will also see why this has happened. Restrictions that the ones that are attached to Turnkey negate the reason why tokens are remotely appealing in the first place. They are tracked on shared ledgers and this is known as being the blockchain. This is a very inexpensive source of raising money. It also helps them to create a market for the tokens themselves too. Of course, it is also a way for them to incentivize who happens to go first. For example, do you remember how AirBNB and Uber paid more to their very first few drivers? Or hosts? A lot of people aren’t sure if this is going to work. Some may wish to buy tokens right now because they think that the price is cheap. They might also believe that there is going to be a much bigger demand for production in a future market. This may be correct, or they may be mistaken, but either way, this is not the point at all. If the US believes that they need to promote any kind of use for the blockchain then they cannot treat tokens in the same way because this would essentially neuter the valuable and most fundamental quality.
The transferability prohibition may seem deeply engrained in this analysis and it also shows what the functionality requirement is. This also needs to encase interoperability and even transferability too. This is a touchstone on the network.
Of course, there are no transferability caveats and it doesn’t show that the discussion is going to be advanced or even that any clarity is going to be provided. This is bad news to say the least, but it is interesting to say the least.
Of course, the new guidelines have also gone a long way to try and reaffirm that the agency’s conclusion stems from an early example of token and blockchain offerings. It should be noted that both Ethereum and even Bitcoin are not securities because they are decentralized. This is most certainly going to frustrate a lot of leaders when it comes to the new projects on the blockchain and the main reason for this is because they believe that they face a huge new range of obstacles.
The new guidelines have also ruffled a few feathers. This is especially the case when you look at the cryptocurrency industry. This was to be expected to say the least. Albert Lung is a securities lawyer and he has stated that the agency have been telegraphing their intentions for quite some time. Senior officials have been talking about this more and more often, and the subject has been well-debated.
Lung has added that the new guidelines will have a chilling effect and that even more entrepreneurs are going to be leaving the US. They are going to be setting up shop in places such as Malta or even Switzerland as well. This is where the laws on tokens are way more permissive. He did state that the SEC are at fault, and that the fraud that is being widespread right now has dogged the token and it has left the agency with not much choice at all. All of this puts start-ups for cryptocurrency in a bad position. Their hopes of having a token sale that is going to fund their project is not being shown in a good light at all, and now people are going to be forced to meet the new guidelines. It has also been stated that the securities are being registered and that there need to be more traditional options too.
Lung has stated that one alternative to the Reg A Plus offering is that it describes a lot of recent laws. This lets companies who want to raise less than $50 million in the public market, have a slimmed down IPO process. The registration process would also be much simpler too. He then went on to add that one of his own clients is using this route for a token and that even though the filings are secret, he does expect that a dozen other companies are doing the exact same right now.
Token sellers are using this route right now and they are always going to be gaining traction too. In the meantime, however, certain applications are going to be facing a really long wait at the SEC. This is a problem for start-ups and this is especially the case when you look at the crypto-related technology that is out there right now. This is evolving rapidly, and it is also delaying risk too. This is making their projects completely obsolete. Meanwhile, a lot of people are really counting on Congress to try and intervene. They are also trying to help companies to face far less demands from the SEC. They are hoping that this is going to make a huge difference to them and that it is also going to help them to carve out certain offerings too. In an email, Warren Davidson has come out to say that the market does need a good amount of clarity. Sure, the idea of guidance from the SEC is good but this will bring about a lot of new questions. Guidance can only be coming from congress.
