|
The
plan must show whether those products can continue to be traded
as securities, or if they change characteristics over time and
no longer meet that definition, said Hester Peirce, a U.S.
Securities and Exchange Commissioner, at an industry conference
in Chicago.
The long-awaited proposal to consider allowing blockchain
companies to issue Initial Coin Offerings (ICOs) came after the
SEC repeatedly said the tokens can be considered securities and
are subject to the same safeguards required in traditional
securities sales.
A blockchain is an online ledger of transactions maintained by a
network of computers, which gained prominence as the technology
that underpinned digital currencies such as bitcoin.
Peirce's proposal is subject to public consultation before the
SEC issues a formal measure.
The plan calls for a three-year window for firms to develop a
network that allows for tokens "to be distributed to and freely
tradable by potential users, programmers and participants in the
network," while preserving important protections for token
purchasers.
ICOs have become a bonanza for digital currency entrepreneurs,
allowing them to raise millions quickly by creating and selling
digital tokens with no regulatory oversight.
The proposal aims to provide a legal framework for blockchain
firms to offer and sell tokens under federal securities laws,
while also determining whether a separate "decentralized"
network would be better suited for these products after three
years.
The plan would require firms to issue disclosures tailored to
the needs of token purchasers. They would include information
about the source code and a development plan, as well as an
initial development team that assesses the nature of the tokens
after three years, Peirce said.
Technology platforms must also disclose applicable anti-fraud
provisions and clarity on when a token transaction constitutes a
securities transaction at the end of the three-year period.
"I see this proposal as a path forward that achieves the
objective of getting token purchasers the information they need,
but it is also just a sketch - a work in progress - that
requires productive engagement from the public," Peirce told
Reuters.
(Reporting by Katanga Johnson; Editing by Chizu Nomiyama, Dan
Grebler and Richard Chang)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
