The Securities and Exchange Commission recently got involved in providing oversight in the cryptocurrency industry. The regulatory body deliberated on the matter of whether digital currencies are securities or not. Should events have turned out the other way around, further compliance measures would have been required from companies looking to create their initial coin offerings or be a part of the crypto ecosystem.
Instead, the SEC made an interesting remark regarding digital currencies. The regulatory body made an assertion that appears to advocate for digital tokens and potentially clearing the way for support in crypto markets. The statement raises questions for investors and seemingly creates a distinction that will almost be impossible to define.
The Option of Regulation May Not Be Sustainable For All Coins
For investors, whether a token is classified as a security or not plays a significant role when it comes to determining how much information and what type of data they’ll receive about the token when looking to invest. Significant protections apply to securities, while offerings not governed by securities laws involve more risks and uncertainty.
An investor might get regular financial reports regarding an investment, only at an unspecified time shortly to stop getting guidance. The difficulty in deciding that turning point could make virtual currencies uninteresting to investors who demand regulatory protections.
Demand For Cryptocurrency Regulation
The most successful cryptos should be regulated because investors will take advantage of the decentralization of proprietary data that would have helped promoters profit at the investor’s expense. Crypto enthusiasts who want to avoid regulation have made it clear regarding how little they regard the investors they should otherwise have served. Only by collectively showing a preference for investments that are regulated can investors best make sure illicit ICOs won’t abuse their demand for digital currency opportunities. Hence, it is safe to say, the SEC clearing the road to deregulation may be the worst news crypto investors cold get.