On 13 June, the United States Securities and Exchange Commission (SEC) will host an Investor Conference in Atlanta, where the securities classification of tokens and initial coin offerings (ICOs) is among topics expected to be discussed.
The event at Georgia State University, Atlanta will have all five SEC commissioners in attendance. After a town hall event, attendants can meet members of the SEC for further discussions with regards to regulation, fintech, mutual funds, fraud prevention and cryptocurrencies, the latter of which is likely to be a hot topic.
Inviting crypto discussions
The official SEC webpage for the event reads: “Meet the people who help make Wall Street work for Main Street. All five SEC Commissioners are coming to Atlanta to meet with you: young people, the military, urban and rural, those saving for retirement, and seniors—the diverse, the dynamic people of the southeast region.”
Chairman of the SEC, Jay Clayton, will the most relevant name on the ticket for those who are concerned with his evaluation that ICO tokens could be classified as “securities” and was “unhappy” with how ICO operations were conducted.
While not believing every “ICO is a scam“, Clayton does, however, believe that these tokens should be treated as securities as opposed to utilities. The cryptocurrency community thinks that should that classification be passed into legislation, the results would be catastrophic for the market as it will impose strict tax regulations as well as determine who could legally own and invest in cryptocurrencies.
However, it appears as though Clayton has good intentions for the industry considering he made comments questioning what would happen if the crowdfunding method for the nascent technology continued to have illegal and illicit activities tied to it.
Classification confusion
He believes that should fraudulent activities continue, regulations will be so strict that they would stifle the “capacity of this new security”.
Clayton has firm beliefs in regulations being paramount to the future successes of the industry; in June 2017, the SEC classified ICO tokens as “investment contracts” which technically made them securities based on the Howey Test. Ethereum co-founder Joseph Lubin is of the “extremely comfortable” persuasion that they are not securities.
Both the Federal Trade Commission (FTC) and SEC have been working to educate consumers and investors on the risks involved with ICOs; the FTC held a ‘Decrypting Cryptocurrency Scams’ workshop and the SEC also released an educational website to demonstrate what a scam/hoax token offering looked like.
While there is significant confusion in the United States on how to determine what an ICO token is, the discussions occurring in June will be revealing of the direction that the SEC and FTC will take.
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