The chairman of the US Securities and Exchange Commission (SEC), Jay Clayton, has acknowledged the potential of initial coin offerings as a fundraising method, but also warned that “securities laws must be followed”.
As reported by industry website Coindesk, last week Clayton spoke about the SEC’s progress in 2018 and the commission’s regulatory agenda for next year. With regards to token sales, he said: “I believe that ICOs can be effective ways for entrepreneurs and others to raise capital.”
However, the SEC chairman also signalled that the regulator will continue to enforce securities rules when appropriate. “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 said.
Last month the SEC ordered to ICO projects, CarrierEQ and Paragon Coin, to register their tokens as securities and refund investors, among other penalties. The move contributed to the big cryptocurrency sell-off that took place in mid-November.
“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,” Clayton said on Friday.
Meanwhile, Ethereum, which is the leading platform for ICOs, saw some respite over the weekend, with the price of its native token seeing some gains after a challenging Friday session. The token finished the Sunday session at $95.14, having started the day at $92.04. However, the coin has lost all of this progress in today’s session.
As of 15:13 GMT, the Ethereum price stood at $91.88, according to data from digital currency tracker Coinmarkecap. The digital coin has lost 5.5% over the past 24 hours.
For further information on how to buy and trade Ethereum, see our comprehensive Ethereum guide.