US SEC commissioner Proposes Exemptions from ICO Restrictions

United States SEC commissioner, Hester Peirce, proposed an exemption on blockchain companies raising capital through the ICO route, Reuters reported.

The proposal is not an official one, though SEC frequently said in the past that crypto / digital tokens offered as a part of Initial Coin Offerings (ICOs) can be considered as securities with safeguards required in traditional securities, notes the report.

Executive Opinion

Reuters report states a statement from Peirce, "I see this proposal as a path forward that achieves the objective of getting token purchasers the information they need, but it is also just a sketch - a work in progress - that requires productive engagement from the public."

Peirce further said in the report, "The plan would require firms to issue disclosures tailored to the needs of token purchasers. They would include information about the source code and a development plan, as well as an initial development team that assesses the nature of the tokens after three years."

SEC Proposal to deal with ICOs

The Reuters report stated that agreement is also required from SEC Chairman Jay Clayton and other commissioners on the proposal before inviting any public comments.

ICOs, though currently not fully regulated, allow technology startups to raise capital for their projects. Due to unregulated nature, people often fall prey to fraudsters leveraging ICOs for their own gains.

The proposal lists a three-year window for blockchain companies to develop and deliver on a blockchain network so that crypto tokens can be distributed and traded. At the same time, the interests of token purchasers should be also protected.

The developing countries like India should also look at regulatory infrastructure to promote the blockchain industry in the country.