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BY CNA team - September 29, 2018

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US House reps asks SEC to clarify ICOs

US lawmakers urges SEC to clarify stance on ICOs
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US lawmakers from the House of Representatives have written a letter to the chairman of the country’s securities regulator asking for clarification over cryptocurrencies and their offer and sale or what is commonly called initial coin offerings (ICOs)

The letter to US Securities and Exchange Commission (SEC) chairman Jay Clayton in particular emphasised the need for formal guidance clarifying policy over enforcement actions.

They believe that such actions are causing a lot of uncertainty for the development of innovative technologies.

The lawmakers requested the SEC’s views on its criteria on what constitutes “securities”, where such digital tokens are offered for sale, and asked for more specific “frequently asked questions” type examples to aid market participants in better understanding how the rules are applied.

They also asked for the SEC’s stance on whether tokens sold in an investment contract deemed as securities but can possibly turn out to be non-securities be analysed again separately from the original purchase agreement.

They are also asking the SEC to describe the tools it is using to offer more concrete guidance to innovators.

The legislators say that while the guidance may take time to be fleshed out, they also cautioned the regulator to be mindful of the speed in which the blockchain technology is developing and asked that any response should take that into consideration.

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