An official with the US Securities and Exchange Commission said the agency will soon clarify when and how cryptocurrencies may be classified as securities.
SEC Director William Hinman said at the D.C. Fintech Week conference the “plain English” guidance is for developers to use when planning initial coin offerings to help them figure out whether it may be classified as a security. No publication date was given.
Jay Clayton, the head of the SEC, has stated many times that he considers some ICOs to be securities and should be regulated as such.
If developers are still unsure whether their ICOs are subject to SEC regulation, Hinman said they can get in touch with the SEC’s new FinHub, which was created to help startups with their questions about securities and security offerings.
CoinDesk reported that when asked what the SEC would look for in classifying a token sale as a securities offering, Hinman replied:
“If someone’s offering an instrument for money or other consideration to a third party, and that third party expects the offerer to generate a return or so something that will increase the value of the coin or token or whatever they want to call it, and there’s that expectation of return, we’re generally going to see that as a securities offering.”
Plain enough for you?