- 20th June 2018
- Posted by: emy
- Category: ICO
CBOE Global Markets President Chris Concannon claims that the ICO sector could soon face a two-fold regulatory “reckoning” that will happen in two separate waves.
Concannon thinks that the first thing that will happen is that the U.S> Securities and exchange Commission (SEC) will classify ICOs as unregistered securities and that this would mean the holdings of investors would be “rendered valueless.” As a result, a second wave would follow in which class-action lawsuits are filed against the companies behind ICO projects.
In his interview with Business Insider, Concannon also claimed, “ICO investors should lay awake at night”, because of the lack of certainty in the market. He also pointed out that U.S. investors being offered an “unregistered coin” would be investing in an unregistered security and that legally this would make that person an “unregistered underwriter” of the coin.
This gloomy prognosis for the ICO market is not shared by everyone. Robert Hockett, Professor of Financial regulation at Cornell University said, “I don’t think it is the case that people involved in the business are going to be prosecuted against as if they have been violating the law. But there is a little bit of a room for exception with something particularly egregious.” In other words, the SEC is only likely to prosecute in the most extreme cases.
Business Insider estimates that ICOs will raise $7 billion in 2018, using data from Token Report, which is almost double the amount raised by ICOs in 2017. U.S. and Canadian regulators have been busy looking into suspicious crypto investment products on an operation called “Operation Cryptosweep,” and it is likely there will be more of this in North America. And that’s why blockchain-friendly jurisdictions elsewhere in the world are doing so well.