SEC’s ‘ICO Guide’ With A Gloomy Outlook For Cryptocurrency In 2019

The Securities and Exchange Commission (SEC) is in the crypto news today after tweeting out the guidelines for the people launching and investing in ICOs. Named the ‘ICO Guide’ – SEC’s paper comes a little too late of the cryptocurrency boom market. However, the document still focuses on Bitcoin, altcoins and cryptocurrencies, mimicking a gloomy outlook with at least one possible violation of the First Amendment on the part of the SEC.

According to the SEC, a security is:

“A token or offering that promotes the likelihood for future returns based on the entrepreneurship or efforts of others.”

That said, it is no surprise that some prominent crypto executives have already begun declaring themselves as part of a “protocol” rather than a company over the recent months. One of them is Tron’s Justin Sun who recently said:

“We can see that Tron is also more like a protocol rather than a company. I think that’s also introduced like a brand new concept of the protocol rather than a company institution or profit or entity.”

Sun also took the opportunity to promote his own projects, TRON and BitTorrent.

According to the SEC, however, a crypto exchange would be in violation of securities laws even if it unknowingly facilitates the trade of security coins and tokens.

“If a platform offers trading of digital assets that are securities and operates as an “exchange,” as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration,” an excerpt from the document reads.
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As SEC also noted, it doesn’t matter whether an exchange is centralized, proprietary or decentralized and autonomous – what matters is that unregistered buying and selling happens here.

“The activity that actually occurs between the buyers and sellers—and not the kind of technology or the terminology used by the entity operating or promoting the system—determines whether the system operates as a marketplace and meets the criteria of an exchange under Rule 3b-16(a).”