According to the CBOE President’s two great waves of regulation will soon fall short of aspirations by the market. Investors should be especially vigilant, as there will be fundamental changes.
The President of the CBOE, Concannon yesterday claimed in an Interview to Business Insider that the ICO market is facing a major regulatory Change. This could shake the view of Concannon the industry as a whole (freely translated):
The reckoning will come in two waves. On the ICO-market, a great change takes place, the investor should at night to keep awake.
The theory of Concannon says that crypto-currencies, which were issued on ICOs, are classified in a first wave, first as a securities, whereby the Token of investors “worthless” would be. In this first wave would focus the SEC, the company behind the ICO projects.
In a second wave of numerous collection would be filed by the investors against the companies behind the ICOs in order to compensate for the own monetary loss. As we reported, was observed a similar behavior is already a few weeks ago, as a disgruntled XRP-an Investor has filed a class-action lawsuit against Ripple in relation to the unresolved classification of the crypto-currency as the value of paper.
Finally, the SEC Chairman, Jay Clayton had made it clear that all of the ICOs are to be considered as securities and, ICOs are, therefore, receive no special regulatory treatment. Only Bitcoin and Ethereum have been recently confirmed by William Hinman, Director of Corporate Finance of the SEC, to be of no value paper.
The gloomy idea of Concannon envisions a future in which the SEC determines that the largest part of the ICOs are not registered securities, and therefore all market participants in a “legal quagmire” would sink.
However, observers under market so far completely unclear whether the SEC will also look retrospectively to all ICOS. Robert Hockett, a Professor of securities law at Cornell University and the interview partner from Business Insider stated in this respect that he can think of a retroactive persecution, in principle, difficult to (freely translated):
I don’t think that it is so is that the people who are involved in the business, be prosecuted, as if you had violated the law. But there is a game room for exceptions.
For Hockett, the move would mean a shift in the market, would not be without a ground-breaking precedents. As a result, the market could, however, be the “Wild West”and in a “regulatory safety phase” the occurrence of actions, in which, as he agrees to collection and legal disputes emergence. In the long run, it will give the view of Hockett but a cleansing of the market, which will help the market.
It is a legitimate life cycle of each new Asset that is very popular. First there were the currencies of tulips and mortgage-backed securities, and now Crypto.
Whether it actually comes as Concannon pictures, from our point of view at least, very questionable. The SEC around Jay Clayton has always stressed that the authority for the protection of investors from fraudulent ICOs.
In addition, Clayton had stressed in the past, several times, that the authority sees the Blockchain technology as an Innovation. Hard action, and in particular retrospectively, it seems from our point of view, therefore, rather unlikely.
Regardless of John McAfee today announced that it has suspended any cooperation with ICOs on the basis of alleged threats by the SEC, and ICO projects will no longer apply.
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