Breaking Down SEC ICO Regulations
June 21 2018 - 12:44PM
ADVFN Crypto NewsWire
Bitcoin Global News (BGN)
June 21, 2018 -- ADVFN Crypto NewsWire -- William Hinman, the
Director of the Division of Corporation Finance at the Securities
and Exchange Commission (SEC) made some explicit definitions for
ICOs, tokens and cryptocurrencies. The major headlines was that
Ethereum’s ETH is not a security. However, based on definitions,
the initial sale of ETH in 2014 would have been a
security.
Essentially, any token used in a
fundraising process that can give investors a return, or investors
can get a return on the secondary market by selling the token to
someone else is a security. So how can ICO’s go about complying
with regulation?
ICOs or other tokenized fundraising
methods that want to raise money from investors in the U.S. will
have to sell the tokens in either a private placement or in a
public offering. There are four categories that set limitations on
participants, funding total, advertising and resale of the
token.
Regulation A+
Regulation CF
-
Anyone can participate.
-
$1.07 million (Limits on investment
per investor depending on income or net worth)
-
Advertising is not
allowed.
-
Cannot be resold in public markets
within a one-year period.
-
Release annual reports and file
with the SEC (Form C).
Regulation D 506(c)
Regulation S
-
Anyone outside of the
U.S.
-
Unlimited funding.
-
Advertising is allowed.
-
May not be resold to US investors
for a restricted period of time
-
No public disclosure or ongoing
reporting to SEC.
By: BGN Editorial Staff
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