Last week, SEC announced that some Initial Coin Offering (ICO) tokens could be considered securities. This means startups catering to US citizens would need to abide by current regulations and register with SEC. However, it appears that many firms may be ignoring SEC’s warnings. They may push forward with their token distribution events regardless of the rules.
According to a tokendata.io, there are about 120 upcoming/active token distribution events for 2017 and roughly 20 announced since SEC issued its warning. A Tech Guam article covered the information:
Some industry participants and analysts had thought such a decision would have a chilling effect on the ICO market. But 20 new ICOs were announced since the SEC’s decision, with more than 120 scheduled to launch this year….
More at: 20+ New ICOs Announced Despite SEC Warnings – Bitcoin News
U.S. Securities Laws May Apply to Offers, Sales, and Trading of Interests in Virtual Organizations
FOR IMMEDIATE RELEASE
Washington D.C., July 25, 2017—The Securities and Exchange Commission issued an investigative report today cautioning market participants that offers and sales of digital assets by “virtual” organizations are subject to the requirements of the federal securities laws. Such offers and sales, conducted by organizations using distributed ledger or blockchain technology, have been referred to, among other things, as “Initial Coin Offerings” or “Token Sales.” Whether a particular investment transaction involves the offer or sale of a security – regardless of the terminology or technology used – will depend on the facts and circumstances, including the economic realities of the transaction.
The SEC’s Report of Investigation found that tokens offered and sold by a “virtual” organization known as “The DAO” were securities and therefore subject to the federal securities laws. The Report confirms that issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies. Those participating in unregistered offerings also may be liable for violations of the securities laws. Additionally, securities exchanges providing for trading in these securities must register unless they are exempt. The purpose of the registration provisions of the federal securities laws is to ensure that investors are sold investments that include all the proper disclosures and are subject to regulatory scrutiny for investors’ protection.
“The SEC is studying the effects of distributed ledger and other innovative technologies and encourages market participants to engage with us,” said SEC Chairman Jay Clayton. “We seek to foster innovative and beneficial ways to raise capital, while ensuring – first and foremost – that investors and our markets are protected.”
More at: SEC.gov | SEC Issues Investigative Report Concluding DAO Tokens, a Digital Asset, Were Securities
Waves, a decentralized blockchain platform focusing on custom blockchain tokens operations, has announced the launch of an ether gateway within the lite client.
The implementation of the ether gateway follows the launch of bitcoin, USD and EUR gateways. The gateway will enable users to store ETH and trade it against other tokens on the DEX.
“We’re really pleased to add another gateway to the Waves client,” comments Sasha Ivanov, Waves CEO. “Ethereum is the foremost blockchain platform after bitcoin itself, and it’s important to be able to offer users the opportunity to trade ETH on a decentralised exchange. In due course we’ll be adding more coin gateways, broadening our appeal and allowing not only trading but Waves crowdsales that collect a whole range of cryptocurrencies directly.”
More at: Blockchain tokens platform Waves launches ether gateway – EconoTimes
Launching Next Week, Aims To Resolve Token Sale Problems
In the middle of the hype around initial coin offerings — the fundraising phenomenon that has raised $1.2 billion in crowdsales this year for new projects, many of them little more than white papers — there are serious entrepreneurs focused on building transformative technology.
Their vision is usually of a decentralized internet dubbed Web 3.0. While it’s not entirely clear what this next-generation web will look like or whether it will actually come to fruition — the early days of the internet were full of idealistic visions of peer-to-peer communication, and now everyone talks to each other on centralized platforms like Google, Facebook and iMessage — one emerging hypothesis is that one of the earliest pieces of it to be built will be a decentralized infrastructure layer.
One prime example of infrastructure is data storage, which has several projects competing to take on the likes of Amazon Web Services — all of them doing so with a native cryptocurrency or token that incentivizes each actor in the network to engage in various acts such as offering storage on the network or paying for disk space.
One of the most anticipated of these, Filecoin, launches its token sale, which features some innovative design choices, next Thursday, July 27 –
“The amount of storage that is out there that is not in use is enormous,” says Juan Benet, founder of Protocol Labs,
More at: Filecoin ICO Release next week – Solving token sale issues – Ethereum World News
A mysterious cyberthief made off with $7 million in the cryptocurrency Ethereum on Monday after hacking a virtual currency trading platform during its Initial Coin Offering and inserting a malicious address where digital investors were tricked into sending their funds.
The platform provider, a blockchain tech startup called CoinDash, disclosed in an online statement that more than 2,000 investors unknowingly sent their virtual money to the hacker, for a total of roughly 37,000 Ethereum, which equates to around $7 million. The cyberattack occurred immediately after CoinDash publicly launched its ICO token sale on July 17, the company noted.
In response, CoinDash has launched a forensic investigation, contacted law enforcement, and intends to credit victims with tokens as if they had actually sent their investments to the correct address. “We are currently gathering information regarding each for the attack victims and will release the complete list for our contributors and community review shortly,” CoinDash said in the statement, attributed to co-founders Alon Muroch and Adam Efrima, and the CoinDash team.
“The only way now is to move forward. The company’s vision is intact and the products we are developing are still in high demand (even more so now),” the statement continues. “Such malicious attacks will not divert us from developing a product that will make crypto investments more accessible to the public.”
More at: Hacker steals $7 million in Ethereum cryptocurrency after compromising start-up’s token sale – SC Magazine
EOS is one of the most talked about blockchain projects distributing a token; and it doesn’t even have a blockchain yet. Launched by block.one, the company building the EOS.IO software, the EOS token is explicitly stated not to have any value, utility, or purpose. Yet its token market capitalization has already surpassed that of older and more well-established cryptocurrencies like Zcash, BitShares, Steem, and Augur.
Trading volume on EOS tokens has exceeded US$91 million since July 1, when it was listed on the major cryptocurrency exchange Bitfinex. Despite heavy speculative activity and raising $185 million in just the first phase of the token distribution, many are puzzled about the question: What is EOS?
Like Ethereum, EOS is a smart contract enabled hosting platform built for open-source projects and consumer-facing decentralized applications. It intends to take market share from Ethereum while promising a more scalable blockchain with usability for large-scale businesses.
Unlike Ethereum’s virtual machine which acts as a distributed global supercomputer, EOS is built around a distributed operating system-like construct, which applications can be built upon.
“The resulting technology is a blockchain architecture that has the potential to scale to millions of transactions per second, eliminates user fees and allows for quick and easy deployment of decentralized applications.”
More at: The valueless and utility free token for EOS exceeds $1 million market cap – Brave New Coin
InsureX has announced that due to security attacks on its system it has halted its crowdsale with immediate effect, two days after starting its sale.
Founded in 2017, the London-based insurance blockchain startup had only launched the opening of its ICO crowdsale on the 11th July, becoming the first blockchain-based marketplace to be utilized for the trade and management of insurance products.
However, on the 13th July, the company announced that because of security attacks on its system over the last two days they had decided to stop the sale.
This action is not taken lightly but is necessary to protect existing IXT holders and stakeholders of InsureX. We have been working around the clock to keep the token sale open, but the sheer number of attacks is now overwhelming.
More at: Insurance Blockchain Startup InsureX Halts Crowdsale due to Security Attacks – CryptoCoinsNews