Former CFTC Chairman: ICOs Should Be Regarded as Securities


October- 16, 2018 | AtoZMarkets

According to Bloomberg Oct. 15, Gary Gensler– Former chairman of the U.S. Commodity Futures Trading Commission (CFTC), said that most tokens sold through Initial Coin Offerings (ICOs) should be regarded as securities.

In an answer to whether he sees a necessity for regulating blockchain technology, Gensler confirmed “we should keep technology-neutral”. Emphasising the necessity of ensuring the protection of investors within certain blockchain applications, like cryptocurrency.

“I think that cryptocurrencies like Bitcoin (BTC) need more protection, and probably more protection than even the oil markets.”, said Gensler, pointing to that “traffic lights and speed limits” are needed to ensure confidence on “crypto roads.”, referring to that the two will coexist, but “it will take a number of years to sort it through and get the balance right.”, as per his description.

Protection of Investors Should Be at the Forefront

Gensler’s words came in harmony with what Valerie A. Szczepanik said- SEC Senior Advisor for Digital Assets and Innovation.

“if you want the crypto industry to flourish, protection of investors should be at the forefront.”

The media reported that SEC chairman Jay Clayton, as speaking at a U.S. SEC and CFTC senate hearing in February, said that while every ICO token the SEC has seen so far is a security, there should be differentiation between tokens and major digital currencies such as BTC and Ethereum, as the defining ETH as a security has reportedly been questionable.

Earlier n December last year, Clayton made a public statement, referring to that most tokens sold in ICOs are likely securities under U.S. law, noting that the “content of the transaction is more important than the form” in determining if an investment is a security.

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