SEC DAO Report On Initial Cryptocurrency Offerings– Today is the first in a LawCast series talking about the recent SEC investigation and public statements on initial cryto-currency offerings or ICOs. On July 25, 2017, the SEC issued a report on an investigation related to an initial coin offering (ICO) by the DAO and statements by the Divisions of Corporation Finance and Enforcement related to the investigative report. On the same day, the SEC issued an Investor Bulletin related to ICO’s. Offers and sales of digital coins, cryptocurrencies or tokens using distributed ledger technology (DLT) or blockchain have become widely known as ICO’s. In a prior LawCast series, a introduced the topic of DLT, also known as blockchain. The basis of the SEC report is that offers and sales of digital assets, including cryptocurrencies, are subject to the federal (and state) securities laws. From the highest level, the nature of a digital asset must be examined to determine if it meets the definition of a security using established principles and in particular the Howey Test. All offers and sales of securities must either be registered with the SEC or there must be an available exemption from such registration. This statement applies to cryptocurrency…
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