Your utility token ICO is Probably a securities offering (but your mom’s may not be). U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton issued a public statement on cryptocurrencies and initial coin offerings (ICOs), providing blockchain startups and ICO investors alike with the most in-depth look yet into the SEC’s stance on this nascent fundraising model — as well as whether utility token ICOs are subject to SEC regulation.

It’s a lengthy statement, and all market participants should read it in full, whether they intend to engage in ICOs or not. Nevertheless, here are the highlights.

Chairman Clayton was careful to state that although the SEC is concerned about ICOs, he believes the fundraising model is a promising way for startups to raise development capital. “I believe that initial coin offerings – whether they represent offerings of securities or not – can be effective ways for entrepreneurs and others to raise funding, including for innovative projects,” he said.

Similarly, he stated that the technology used to power cryptocurrencies and ICOs could prove to be a disruptive force in the financial industry, potentially presenting investors on both Wall Street and Main Street with “promising investment opportunities”. “The technology on which cryptocurrencies and ICOs are based may prove to be disruptive, transformative and efficiency enhancing.

 I am confident that developments in fintech will help facilitate capital formation and provide promising investment opportunities for institutional and Main Street investors alike,” Clayton said. Nevertheless, this positive outlook does not mean the SEC is going to turn a blind eye to the ICO marketplace. Read more from…

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