Obviously the talk of the town is regarding the SEC breaking its silence in relation to the ICO / DAO space.
To be honest, we're a bit surprised at the panicking going around.
To summarize, the SEC said that:
- The DAO tokens were in fact securities.
This is hardly surprising to anyone. The DAO was a decentralized venture/hedge fund. Token holders received a share of the profits of the funds.- They are not pressing charges on Slock.it
Surprising, but good I guess.
- Other tokens sold through ICOs might be securities.
Here the SEC is playing a smart waiting game. It's basically saying "hey, we're watching" - but it's not altering the long standing securities law framework that has been operating in the US for quite a while.
And this is one of the reasons why we still haven't seen any "tokenized equity" projects done by pros.
FWIW, high quality projects have been paying lawyers millions of dollars already to make sure they were not selling unregistered securities.- Exchanges, and individuals reselling tokens which are deemed securities, are violating securities laws.
This, in our opinion, is the key message to take away from the report.
This is the SEC's way of saying, "look, it's too hard to regulate issuing so we'll just tell you that you might be violating securities laws. BUT, if you are an exchange operating in the US or with US customers and you are hosting securities, then we know very well where and how to come at you. Also, if you're an individual who bought and sold securities, get scared". TAKEAWAYS:
The most impressive thing for me was to see how much the SEC understands the issue and the depth of thought it put into this. The story is flawless and the analysis is precise.
These are my speculations about the impact of the report:- There will be two different paths for token issuers:
1) Most projects will try to comply with US laws, and use CoinList to only offer a sale to accredited investors. This is obviously a massive win for the AngelList-backed company.
2) A minority will go for war. Anonymizing features will become more and more sought after even in asset-representing or usage tokens.
Protocols like Zerocoin and the such will gain in popularity even more, with Coins implementing them following suit.
Monero already delivered a pretty good result this week.- The race towards decentralized exchanges will accelerate
This might be the first easiest massive and major use case for decentralized ledger technologies and smart contracts.
The SEC can do absolutely nothing with anonymous tokens and decentralized exchanges.
The attention of the SEC will then have to be targeted exclusively towards the issuers.In any case, we highly suggest reading the whole report.
If you don't have time, a must read is Kyle Mitchell's 7 takeaways post.
Interesting also the comments from Emin Gun Sirer, who says this is the end of beginning for blockchains
Not everyone has been playing in the grey zone. Some companies are pushing hard to comply with US laws, and LedgerX just received this week the authorization to open a fully-regulated Bitcoin options exchange by the CFTC
. This is a major step in creating the conditions for institutional liquidity to play in the crypto markets.
Also worthy of mention is Overstock's pioneering work with tØ