Regulators at the Securities and Exchange Commission (SEC) are still worried about this cryptocurrency fundraising craze called Initial Coin Offerings (ICO). However, the agency remains open to a legal avenue for crypto investments isn’t attempting to ban them, based to one commissioner.
“Investors are having a hard time telling the difference between investments and fraud,” SEC Commissioner Robert Jackson told CNBC’s “Squawk Box” on Monday. “Down the road, I think we will be thinking about ways to make those investments work consistent with our securities laws.”
When asked if his comments meant more regulation or an outright ban, Jackson said, “It doesn’t suggest either of those things.”
“Right now we are focused on protecting investors who are getting hurt in this market,” he said.
In a ICO, tokens or crypto currencies are positioned up for a kind of crowdfunding for sale.
The agency has warned of all pump-and-dump plans in ICOs, and stepped up its authorities with crackdowns on fraud and scores of subpoenas this past year. SEC Chairman Jay Clayton made it clear in a February statutory hearing that despite claims that several are “useful tokens,” every ICO he has seen can be a security.
Jackson underlined the need for regulation and said the current crypto craze is what other markets might look like without financial oversight.
“If you want to know what our markets would look like with no securities regulation, what it would look like if the SEC didn’t do its job? The answer is the ICO market,” Jackson said.
The price of bitcoin tanked below $10,000 in March after the SEC announced that online platforms trading digital assets that are considered securities need to register with the agency. The cryptocurrency has fallen roughly 30 percent this year and was trading near $9,280 as of 10 a.m. ET Monday, according to CoinDesk.
