SEC Guidelines to ICOs

This week, the Securities and Exchange Commission tweeted out its pointers for those launching and investing in ICOs, though several would say that over a year on from the height of the cryptocurrency boom, the guidelines may have come a little late.

That said, the document still presents many points for debate together with a rather gloomy outlook for cryptocurrency exchanges – even decentralized ones – and a minimum of one potential violation of First Amendment on the part of the SEC.

A Protocol or Company

The SEC identifies a security as:

A token or offering that promotes the likelihood for future returns based on the entrepreneurship or efforts of others.

With that in mind, maybe it’s no surprise that some famous crypto executives have begun to declare themselves a part of a “protocol” instead of a Company in recent months. One example is Tron’s Justin Sun

We can see that Tron is also more like a protocol rather than a company. I think that’s also introduced like a brand new concept of the protocol rather than a company institution or profit or entity.

A man with a name for promoting, Sun created a reputation for himself because the turgid, daring founder WHOne’er shied off from creating extravagant claims regarding future success. In late 2018, once Ethereum’s Vitalik Buterin was honest enough to admit that ETH’s 2017 bull-run was supported very little over promotion, Sun took the chance to market his own project, stating:

“Vitalik: next wave of crypto is not going to be built on hype.@VitalikButerin admits that #ETH lead the 2017 bull run built on hype. #TRON will lead next bull run built on massive adoption dapps and @BitTorrent.”

Tweets like these can be an issue that draws the eye of the SEC. Will this not flirt hazardously with the definition of promoting a security? It suggests that an investment in Tron can pay off due to the efforts of others – during this case, BitTorrent.

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