New ICO Guidance In USA

Dawid Paluch
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The United States Securities and Exchange Commission (SEC) wants to create a new direction regarding Initial Coin Offering. The financial watchdog plans to clarify when and how cryptocurrencies may be listed as security tokens.

The difference between the security and utility token is tricky. Often enough, the laws concerning Initial Coin Offering are vague and uncertain. The American commission tries to do something with it.

Plain English Guidance

William Hinman, SEC Director, spoke about ICOs at the D.C. Fintech conference. Hinman has concerns that actual guidance for investors can be confusing. According to the Director, his commission intends to release plain English guidance for developers and investors. The new instruction should help to determine whether any potential offering may be classified as secure or not. He said:

“We also will be putting out more guidance, the idea is a plain English instrument that people can look at and they’ll bring together sort of my Howey-meets-Gary speech, and that analysis … We’ll elaborate on that in a very plain English way, so ‘do I think I have a security offering,’ look at that guidance and you should be able to sort things out.”

It’s not clear when the guidance will be published.

To help investors

The commission set up a new division called Strategic Hub for Innovation and Financial Technology (FinHub). The department provides rapid feedback on questions about securities.

Hinman explained that when you determined whether you have a security, the FinHub would guide you how to register and how to start the coin offering.

The guidance will address secondary market transactions. Thanks to that, investors would know how the SEC may look at tokens post-ICOs.

Hinman was also asked about how the commission classifies token sales. The Director stated that one of the most important factors would be the expectation of a return of investment. He said that it is the crucial aspect of the Initial Coin Offering.

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