SEC “big footing” digital initial coin offerings

The Securities and Exchange Commission Tuesday decided to “coin” a phrase and weigh into the growing digital initial coin offering (ICO) market, which has seen more than $1.2 billion in appreciation this year.

The SEC said that the newly formed digital tokens like Status, iconomi and veritaseum, which all fell more than 22 percent on the news, could be considered securities and therefore fall under its jurisdiction. There have been at 70 different offerings this year.

While the feds did not mention bitcoin specifically as being among the questionable instruments , its value did fall as well on the news.

The agency was addressing DOA, which is an ICO issued by a company in the digital-currency sector. In effect, they are a hybrid security instruments lying between initial public offerings and crowd funding.

“The innovative technology behind these virtual transactions does not exempt securities offerings and trading platforms from the regulatory framework designed to protect investors,” said Stephanie Avakian, co-director of the SEC’s enforcement division said in a statement.

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