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SEC Investigative Report: Digital assets are securities

Jaclyn Jaeger | July 26, 2017

The Securities and Exchange Commission issued an investigative report this week cautioning market participants that offers and sales of digital assets by “virtual” organizations are subject to the requirements of the federal securities laws. 

Such offers and sales, conducted by organizations using distributed ledger or blockchain technology, have been referred to, among other things, as “Initial Coin Offerings” or “Token Sales.” Whether a particular investment transaction involves the offer or sale of a security— regardless of the terminology or technology used—will depend on the facts and circumstances, including the economic realities of the transaction.

The SEC’s Report of Investigation found that tokens offered and sold by a “virtual” organization known as "The DAO" were securities and therefore subject to the federal securities laws. The Report confirms that issuers of distributed ledger or... To get the full story, subscribe now.