US Congressmen Request SEC to Clearly Define ‘Securities’ in terms of ICOs

The chairman of the Securities and Exchange Commission (SEC) Jay Clayton, has more than once, stated that while bitcoin and ethereum are not securities, the same cannot be said of Initial Coin Offerings (ICO).

However, in September of this year, 14 Congressmen wrote to Clayton asking him to clarify what constitutes securities and what does not. Interestingly, some of these Congressmen want the ICO market to flourish and thrive. A portion of the letter reads, “Your input is critical to helping us preempt a heavy-handed regulatory approach that could stall innovation and kill the U.S. ICO market.”

The letter which was penned by four Congressmen, Ted Budd, Warren Davidson, Tom Emmer and Darren Soto,  on behalf of the others says, “We believe the SEC could do more to clarify its position. Additionally, we are concerned about the use of enforcement actions alone to clarify policy and believe that formal guidance may be an appropriate approach to clearing up legal uncertainties which are causing the environment for the development of innovative technologies in the United States to be unnecessarily fraught.”

Interestingly, way before this letter was sent to Clayton, the regulatory body had decreed that not all ICOs could be deemed as securities, in May this year.

SEC Commissioner Hester Peirce had said, “Innovation is always a challenge for regulators. We are used to the way things have been done. Our rules have grown up in response to past technologies. Figuring out whether and how they apply to new ideas is difficult. Technology’s promise is too great, however, for us to bury our heads in the sand. I am here today to ask you and others to help us learn more about the technology so that we are able to think about the regulatory obstacles that may stand in the way of crypto-technology’s ability to improve our lives.”

She had further added, “This is not to say that all ICOs must be deemed securities offerings. Given the undeveloped nature of this area, I am wary of any blanket designation for all ICOs. Instead, the best path forward, at least for the tie being, is to evaluate the facts and circumstances of each offering.”

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