Conducting ICOs in Compliance with the Securities Laws

The Securities and Exchange Commission (SEC) has made it clear that it considers all initial offerings of cryptocurrencies and digital tokens as offerings of securities. The matter is not completely free from doubt, as many cryptocurrency market participants continue to take issue with the SEC’s view. It is not inconceivable that the matter will ultimately end up in court or become the subject of legislation given breath of the ICO market, the potential of the underlying blockchain technology and the vast sums of money at stake. The SEC, however, has given all securities lawyers, accountants and underwriters fair warning, that for the present, almost all digital tokens and cryptocurrencies will be treated as securities under the federal securities laws and that any offer or sale of digital assets must be registered with the SEC or qualify for a valid exemption from registration.

The following link is a table that sets forth the terms of the more common methods of conducting securities offerings under federal securities law and SEC rules and regulations. Failure to fully comply with one of the of the offering alternatives can result in liability for investment losses, investor rescission rights, SEC civil penalties and criminal sanctions.

Click here to access the table “Securities Offering Requirements”:  ICO Securities Offerings