Digital token sales may fall under jurisdiction of the US securities law

The US federal securities law may be applied to different market activities, including distributed ledger technology, depending on the facts and circumstances, and regardless how they are distributed or the way the whole enterprise is shaped – this is an extract of the report by the Securities and Exchange Commission (SEC) published at the Coindesk portal.

After investigating the tokens creation process on DAO, an Ethereum-based cryptocurrency exchange that collapsed last summer, the Commission stated that DAO tokens can be fully likened to securities, while also expressing opinion that digital tokens sales and offers must become subject to the federal securities law.

SEC considers that digital transactions must also be within the legal framework focused on investor protection and market integrity. At the same time this report was published, SEC also issued the information bulletin on ICO, containing warning to potential participants on fraud risks.

By publishing these documents, the Comission has clarified the legal position it took on issues of blockchain assets and ICO.