January 8, 2018
SEC Chairman Clayton Provides Statement on Cryptocurrency and Initial Coin Offerings
On December 11, 2017, SEC Chairman Jay Clayton released a statement on cryptocurrencies and initial coin offerings (ICO) to serve as guidance as both markets continue to expand. The statement provides Clayton’s concerns for the markets due to substantially less investor protection and greater opportunity for fraud. Clayton provides the following guidance for market professionals to consider:
While securities laws do not specifically outline guidelines for cryptocurrencies, the SEC has engaged in related enforcement cases. Clayton has requested for the Division of Enforcement to continue with initiatives of ICOs and cryptocurrencies.
WHAT DOES THIS MEAN FOR ME?
Firm’s should refer to counsel before engaging in any business operations involving cryptocurrencies or ICOs to assess whether they are at risk of violating securities laws. Furthermore, compliance programs should review both the operations of the firm and employee account activity to ensure that appropriate policies are in place to govern preclearance and reporting obligations. As always, Fairview® will continue to provide more information as it is made available.