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posted by martyb on Friday July 28 2017, @04:58AM   Printer-friendly
from the to-flip-a-coin dept.

On Tuesday, the SEC announced that tokens that are sold off in crowdfunding events known as Initial Coin Offerings (or ICOs) in ethereum may be considered securities in some circumstances, and are therefore subject to US securities law. Tokens are digital assets that investors may purchase during ICOs, and they usually have some sort of bespoke functionality—in some cases, voting rights or profit dividends—in the app the investor is buying into.

[...] As for which tokens constitute securities, the SEC concluded that the tokens people bought in 2016 to participate in the DAO—a crowd-directed investment fund that imploded after being hacked that same year—were securities. The SEC notes in its report on the DAO that token-holders purchased the tokens with the expectation of profit "derived from the managerial efforts of others," which qualified them as securities.

Since the people behind the DAO didn't register its token sale with the SEC, it was technically illegal, but the commission stated that it has decided not to bring charges against them.

Going forward, according to the SEC, companies that are issuing tokens as part of an ICO (if they are considered securities) need to register with the commission. This will force companies to comply with regulations that ask them to reveal their financial position and the identities of their management. The SEC also concluded that online exchanges where tokens are bought and traded may have to register as security exchanges.

[...] Needless to say, things are about to get very interesting on the lawless digital frontier.

Source: vice.com


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  • (Score: 2) by tonyPick on Friday July 28 2017, @08:19AM (2 children)

    by tonyPick (1237) on Friday July 28 2017, @08:19AM (#545659) Homepage Journal

    They aren't anonymous - they're pseudonymous. Every transaction is traced to a Bitcoin wallet address, and *all* the transactions are publicly traced, so if one of your transactions links a bitcoin address to a real world identity (by being linked to a physical transaction detail like a bank account, delivery address, personal email, phone, IP node, whatever) then your entire transaction history on that wallet is traceable directly to you forever and always.

    There are ways to limit the impact of this (single use address-per-transaction for a start) but AFAIK that's relatively uncommon.

    From here: http://bitcoinsimplified.org/learn-more/anonymity/ [bitcoinsimplified.org]

    Bitcoin is pseudonymous. Sending and receiving bitcoins is like writing under a pseudonym. If an author’s pseudonym is ever linked to their identity, everything they ever wrote under that pseudonym will now be linked to them. In Bitcoin, your pseudonym is the address to which you receive Bitcoin. Every transaction involving that address is stored forever in the blockchain. If your address is ever linked to your identity, every transaction will be linked to you.

    Starting Score:    1  point
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  • (Score: 3, Informative) by Lemming on Friday July 28 2017, @10:13AM

    by Lemming (1053) on Friday July 28 2017, @10:13AM (#545698)

    There are ways to limit the impact of this (single use address-per-transaction for a start) but AFAIK that's relatively uncommon.

    All current wallet software uses a newly generated address for every transaction by default.

  • (Score: 2) by JNCF on Friday July 28 2017, @04:36PM

    by JNCF (4317) on Friday July 28 2017, @04:36PM (#545847) Journal

    They aren't anonymous - they're pseudonymous. Every transaction is traced to a Bitcoin wallet address, and *all* the transactions are publicly traced,

    ICOs can be on other blockchains. The DAO, which the SEC mentioned directly, was on Ethereum. There's nothing to prevent you from starting an ICO on Monero, Zcash, Ebitz, or whatever new theoretically "anonymous" ring signature cryptocurrency the world has come up with. The SEC might have a very difficult untying those knots.

    so if one of your transactions links a bitcoin address to a real world identity (by being linked to a physical transaction detail like a bank account, delivery address, personal email, phone, IP node, whatever) then your entire transaction history on that wallet is traceable directly to you forever and always.

    *tumble-tumble-tumble*

    There are ways to limit the impact of this (single use address-per-transaction for a start) but AFAIK that's relatively uncommon.

    Satoshi recommended this. It would be silly if people didn't do it, but then, people are silly.