In a recent ruling this, the SEC stated, in the case of one recent ICO, The infamous DAO, that resulted in Ethereum being forked the tokens in question are indeed securities.
What does this mean?!
It means that if you live in the US you should be careful about what ICOs you participate in. Some tokens have worked around this by burning tokens rather than paying dividends to increase price. But It's probably safer to buy tokens on US exchanges to prevent you from having to do so much research on finding out if an ICO is considered a security or not.
How do we know if an exchange is complying with SEC regulation?
Recently Bittrex released a statement regarding the SEC ICO report.
We closely adhere to SEC and CFTC related laws and regulation and we partner with top quality legal, compliance, government relations and regulatory professionals through our relationships with Perkins Coie, Delta Strategy Group and others. We also serve on the Executive Committee of the Chamber of Digital Commerce
As a longtime Bittrex customer it's good to see that Bittrex works closely with the SEC and is active in educating regulators on cryptocurrency.
Prior to listing any new token, Bittrex performs this facts and circumstance analysis and considers if a token might be deemed a security under the Howey Test, prior to listing. We strive to only list “use” tokens or tokens which represent a good or service. We conduct a thorough compliance review to avoid listing tokens that may be deemed a security. We believe this is industry best practice and we are pleased that the SEC Report reaches a similar conclusion.
It's good to see Bittrex is doing its best to cover its and its customer's asses. In grey areas like this it's good to have a standard to judge by.
Conclusion
It's still unclear as to how the SEC will move forward but it looks like US based exchanges are more than ready to comply. What is considered a security is still up in the air and will constantly be debated leading up to regulation.
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