Every time a government releases an official statement regarding cryptocurrency, the alternative investment community holds its collective breath.
The SEC recently published a “Statement on Cryptocurrencies and Initial Coin Offerings”, authored by SEC Chairman, Jay Clayton. This latest release carries the same moderate tone that we have seen from the SEC in the past. For an organization whose primary objective is to protect the investors under its jurisdiction, this measured response to cryptocurrency is incredibly encouraging.
Mr. Clayton makes the SEC’s involvement in cryptocurrencies and ICO’s very clear. “Investors should understand that to date no initial coin offerings have been registered with the SEC… If any person today tells you otherwise, be especially wary”.
However, he continues by saying, “I believe that initial coin offerings – whether they represent offerings of securities or not – can be effective ways for entrepreneurs and others to raise funding, including for innovative projects.”
The balance that is expressed in this latest statement is admirable. I appreciate the position that the SEC is in regarding this emerging technology and asset class. On one hand, they are responsible for protecting US citizens from fraud, scams and abuse. On the other hand, they do not want to stunt the growth of what is proving to be game-changing technology.
Treading with caution in this nascent space is wise. There are certainly individuals who would take advantage of investors if given the opportunity. Yet with those risks comes the opportunity for immense reward.
Recognizing the threshold where risk outweighs reward requires a staggering amount of research and due diligence on potential investments. This precarious scale is what led us to create our proprietary vetting methods, to identify legitimate projects and companies in the blockchain space.
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