SEC Chairman on ICOs; “Effective Way For Entrepreneurs”
One of the most criticized parts of the cryptocurrency market and blockchain industry is the ICO. Initial Coin Offering is a method that many startups in the blockchain industry utilize to raise funds for their projects and companies. The reason ICOs are preferred by companies and players in the market is that in one shot the funds are raised and a community is created for the startup.
Most regulatory bodies and financial setups detest the method because of its gross ignorance of the rules they lay down and the standard they expect for a mass contribution to a startup fund. Another reason the regulatory bodies are so against ICOs is that the market has many examples of people being scammed by proprietors of faulty ICOs and losing millions in the process.
Despite that, the ICO method actually has its merits. It circumvents the entire capital investor procedure and lets the common man be a financial part of the build of products they believe in. The biggest trade-offs in the cryptocurrency market and a section that is always subject to sanctions and bans is the ICO market. With that being said, the bans are imposed by the SEC citing reasons of safety, security and protecting the newbies.
But in recent statements, the chairman of the SEC, Jay Clayton, has admitted that the ICOs are an effective way to raise funds for a startup and is actually quite convenient as well. He further added that if the method adhered to the rules and regulations laid out by them.
Here is what he said;
“I believe that ICOs can be effective ways for entrepreneurs and others to raise capital. The novel technological nature of an ICO does not change the fundamental point that, when a security is being offered, our securities laws must be followed.”
He further added that;
“A number of concerns have been raised regarding the digital assets and ICO markets, including that, as they are currently operating, there is substantially less investor protection than in the traditional equities and fixed income markets, with correspondingly greater opportunities for fraud and manipulation.”
Jay Clayton, a US Congressmen, also introduced two bipartisan bills to tackle the price manipulation in the cryptocurrency market. The two bills essentially ask other trade regulatory bodies to come to a consensus and figure out a roadmap ahead for the cryptocurrency market in the country.
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Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.