2 Months Ago

In the USA, the Securities Exchange Commission (SEC) has released guidance on the issuing of Digital Assets and the way these assets are treated.

The inference is that if certain Digital Assets comply with its direction, then no action will be taken by the SEC, but each company that has, or intends, to create a Digital Asset will be reviewed on a case by case basis.

The guidance, which is called ‘Framework for Investment Contract Analysis of Digital Assets’ attempts to clarify whether a Digital Asset will be treated by the SEC as a security, and therefore will be subject to federal securities laws. The guidelines explain how the Howey Test may be used in connection to Digital Assets, and in particular to Initial Coin Offerings (ICOs).

The SEC outlines some examples, which create the impression that many ICOs launched previously may have breached SEC regulations, as they did not register with the SEC.

Some ICOs may have sold tokens that could be classified, under existing federal legislation, as an investment contract.

However, Bitcoin is not in the SEC’s spotlight, as it has been created in a decentralised manner. Which may help explain why Bitcoin has performed so well this week.

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Digital Assets

4 Months Ago

One of the most successful ICOs last year, that within six months of doing an ICO was valued at over $1billion, is to fight the US Securities Exchange Commission (SEC) as to whether it’s token Kin is not a security.

The SEC believes that Kik has broken US security laws by issuing security. The firm argues that the tokens issued aren’t security tokens but a utility token as it has hundreds of thousands of people have been using Kin as a currency to buy goods and services. The firm plans to formally challenge the SEC’s position. This video is the companies vision for Kin (watch here). To see Kik’s CEO version of why he thinks the SEC has got is wrong read here.

This challenge is important as it will help to clarify and help determine what influence the SEC has and what is and what is not a security token.

Information Security