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.

Information Security
Digital Assets

3 Months Ago

Sam Palmisano, the retired chairman of IBM in a recent interview on Bloomberg said it is hard to come up with a good solution for creating public blockchains which are fully compatible with General Data Protection Regulations (GDPR) in Europe.

Blockchains are immutable, so once data has been added it cannot be changed or removed, which is in direct conflict with GDPR.

Palmisano believes that because private blockchain has more centralization, ought to be more compliant, but because public blockchains are very decentralized they struggle to be compliant with GDPR.

Queen Marys and Cambridge Universities have also raised similar concerns. A possible solution is to ensure that Blockchains do not hold personal/ private data so this information would be held off chain where such data could be removed or changed if required at some stage in the future.