NEW YORK (Ap) — the First exchange offer (IEOs), the latter feel at home in the raising of funds for a cryptocurrency project, strengthening of administrative burdens, and investors are concerned about the future viability of the businesses in the capital have been flashing red flags.
A FILE PHOTO: Bitcoin.com the buttons are seen displayed on the floor of the Consensus-2018 blockchain technology conference to be held in New York City, New York, New York, USA, May 16, 2018. REUTERS/Mike Segar
With the advent of the IEOs – that sidestep the banks and venture capital firms as a means to generate capital for a new business is an example of a market that for a long time and has been trying to break free from the regulation itself.
For their launch, as Facebook is planning to introduce its own digital currency, or a token, a new lease on life-interest in a market, which slumped last year in the midst of the intense regulatory focus. Though Facebook is facing scrutiny from the U.S. Congress to the launch of the social network of the company, and the white paper on digital currency in the sign of Libra.
IEOs, on the exchange, a spin-off of the initial coin offerings (ICOs), which have grown in popularity in 2016, and it raised almost $30 billion since its inception three years ago. ICOs, however, slowed sharply this year and in the midst of a regulatory action against fraud, illegal offerings, led by the united states Securities and Exchange Commission.
“I don’t expect that the IEOs to result in better outcomes,” said Peter Van Valkenburgh, director of the advocacy group Coin Center, in Washington dc. “From a regulatory and legal point of view, there’s not that much of a difference.”
“Call it a idp internally displaced person is not going to change your obligation to pay for the potential that the issuer of the token, if the token matches with the test to be a security, which is, I think, in many cases, the will of the people.”
S IN ORDER TO KEEP THE
Just as in the past three years, the SEC has not changed its tune to, the digital currency offers, no matter what they are called.
In the past month, the Consensus conference to be held in New York, New York, Valerie Szczepanik, SEC -, senior advisor, digital assets, and promote innovation, said the IEOs can become a problem in the United States of america, as the US stock markets have been acting as a broker-dealer, but not registered as such.
Cryptocurrency exchanges, follow the registration and licensing requirements for broker-dealers, alternative trading systems, or national trade shows. And if they don’t, they’re going to be in hot water, Szczepanik said.
There is already a precedent for this in the SEC, if and when the IEOs are to be arranged as well.
In September of last year, the SEC charged the Michigan-based TokenLot, a self-described “ICON Superstore,” to act as a is not registered as a broker-dealer. TokenLot order intake of more than 6,100 retail investors, and it processes more than 200 of the digital token, which the SEC found listed securities, the SEC said.
QUESTIONS ABOUT THE VIABILITY OF THE
Apart from the uncertainty of legal status for start-ups to do the IEOs face of doubts about its viability.
Cryptocurrency research InWara, said that only 30% of the IEOs, this year launched what he calls a “minimum viable product” at the time of the token sales, with the majority of it with nothing more than a website and a white paper.
At the end of the day, IEOs does not detract from the fact that the token has to be to work in the long run, if a utility has a token, he said Ransu Salovaara, ceo of computer consulting firm TokenMarket.
Some market observers also believe that IEOs are not safer just because the exchanges have to be examined in the project. Cryptocurrency exchanges are effectively acting as intermediaries in the IEOs, the carrying out of the functions, such as acquisition due diligence on a project, “know your customer” (KYC) screening, marketing, and sale of coins, and the customers.
Built-in KYC for exchanges? That is a good explanation if it’s true,” said Arnold Spencer, general counsel for Coinsource, which is active in more than 200 bitcoin atms in 28 states. “The problem is that it’s not true – a lot of the non-U.S. stock exchanges have KYC is behind them.”
InWara, in a report, it said that not all of the students from the window of the projects that are to start in their platform. Often, it is the assessment of a project’s location.
“That’s the problem: there is no clear vetting process,” said the InWara. “And as long as the exchanges are free to decide for themselves where to draw the line, bad actors and fraud, computer projects, you will always put yourself in the spotlight.”
Reporting by Gertrude Chavez-Dreyfuss; Editing by Jennifer Ablan and Nick Zieminski