US SEC - initial coin offerings may be subject to securities law

The US Securities and Exchange Commission (SEC) on Tuesday said that offers and sales of digital assets by “virtual” organizations, also known as initial coin offerings (ICOs), or token sales, could be deemed securities and subject to federal regulation.

The SEC says it wants to “caution the industry and market participants: the federal securities laws apply to those who offer and sell securities in the United States, regardless whether the issuing entity is a traditional company or a decentralized autonomous organization, regardless whether those securities are purchased using US dollars or virtual currencies, and regardless whether they are distributed in certificated form or through distributed ledger technology.”

The SEC’s move could prick the ICO bubble and weigh over Bitcoin, Ether and crypto currencies.