SEC To Issue Guidance On Security Token Offerings
The U.S. Securities and Exchange Commission’ (SEC) director of Corporate Finance said that the organization plans to release guidance on when cryptocurrencies should be classified as securities.
This statement was made during the D.C. Fintech Week conference. The guidance will help developers determine whether a token offering ought to be classified as a security or not. The guidance will also cover secondary market transactions and post-ICO activities. There is no information on when the document will be released.
According to the SEC representative, if developers still lack a clear understanding, they can consult the SEC's new FinHub - an online portal for market participants to interact and engage with the SEC.
The representative described the organization’s logic in classifying a token sale as a security offering in the following way: “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”.