The former chairman of Commodity Futures Trading Commission (CFTC), Gary Gensler, suggests that the tokens sold through Initial Coin Offering (ICOs) are to be classified as securities.
If the cryptocurrencies are to be considered securities, then they fall under the purview of the United States Security and Exchange Commission called as SEC. The person who issue coins then have to comply with laws and regulators, and register with the SEC and disclose certain information like some description of the properties and financial statements of the organization.
The Former Chairman on blockchain technology regulation said that they should need to be technology-neutral. He further said that they should stress the necessity to inventor protection with some blockchain applications like cryptocurrencies. He thinks that cryptocurrencies like BTC need more protection than the oil markets.
Gensler said about the future developments in the blockchain regulation that there should be traffic lights and speed limits in order to ensure the crypto roads. According to him, the two can coexist in the future but the situation can take a number of years to get balance and sort out in the right way.
Former Chairman’s words reflect the statement of Valerie A. Szczepanik, who is the Senior Advisor for Digital Assets and Innovation at SEC, stated that in order to see the growth of the cryptocurrency market, there should be an enhancement and priority for the protection of investors.
SEC chairman Jay Clayton, in February, when speaking at the SEC and CFTC senate hearing, said that so far with the ICO tokens, the SEC has seen security, a contrast should be there between major cryptocurrencies – BTC, Ethereum and tokens. Security on Ethereum has raised questions so far.
Last year in December, the SEC chairman in a public statement concluded that tokens sold in ICOs are under U.S. law. He noted that the content of a transaction is more important than the form which determines the security of the investment.