During the U.S. Senate’s first official hearing on cryptocurrencies, Securities and Exchange Commission (SEC) Chairman Jay Clayton said all ICOs are securities and that no ICO had registered with his agency yet. That’s all changed now that The Praetorian Group has filed its $75 million USD token offering with the SEC.
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PAX Token Comes Into Regulatory Daylight with SEC
With Praetorian Group’s PAX token, the SEC officially has its first ICO registrant. The token is a property play, which the group hopes to use to facilitate “the first sound money cryptocurrency ecosystem linked by real property.”
Praetorian Group is reportedly seeking to raise $75 million, or five dollars for each of the 15 million offered PAX tokens. The total token supply is set at 200 million, which, if their fundraising target is met, means the project will be valued approximately at $1 billion.
Notably, Praetorian Group admitted they weren’t even sure that their PAX tokens were technically securities. They decided to take the abundantly cautious approach, however, registering with the SEC regardless.
It’s a route that other projects might wish they’d taken in the months ahead, depending on if the SEC formally starts accusing ICO projects of being unlicensed securities. That remains to be seen, but it is absolutely possible.
Regulatory Schizophrenia in America Right Now
From their separate ivory towers, America’s top regulators are each respectively claiming regulatory purviews over cryptocurrencies. In other words, everyone’s saying something different, and it’s creating an extremely confusing atmosphere for just about everyone.
So @CFTC says #cryptos are commodities, @SEC_News says #utilitytokens are securities, #FInCEN says they’re “generally” money & #Wyoming says they’re property (traditionally purview of the states). I’m sensing litigation is coming. @Tyler_Lindholm @NYcryptolawyer @JonathanMohan https://t.co/H5wCSXkPq5
— Caitlin Long 🔑 (@CaitlinLong_) March 7, 2018
So did FinCEN just contradict itself? From their 2008 guidance, accepting funds in the sale of a commodity is not money transmission, but from their comments yesterday, accepting funds for the sale of a token (which CFTC + judges have declared a commodity), is money transmission? https://t.co/oLb6N7doIV
— Erik Voorhees (@ErikVoorhees) March 7, 2018
The relevant agencies will need to come together and coordinate, lest the ongoing chaos continue to become entrenched. When it comes to cryptocurrencies, what the United States needs now more than ever is a clear, unified regulatory vision that doesn’t sow arbitrary bureaucratic discord.
What do you think? Do you see more ICOs registering with the SEC in the coming months, or do you disagree that tokens and coin offerings are securities? Sound off below.
Images via Omaha, Expanse