NEW YORK (Reuters) - Technology companies looking to raise money by issuing digital coins are moving forward with their plans despite a U.S. regulator’s decision that their offerings may be subject to tough securities laws.

FILE PHOTO: Bitcoin (virtual currency) coins are seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, May 27, 2015. REUTERS/Benoit Tessier/File Photo

Such initial coin offerings, or ICOs, have allowed startups to raise $1 billion so far this year, but until this week it was unclear how the U.S. Securities and Exchange Commission would treat the transactions.

On Tuesday, the SEC decided that tokens issued through the ICOs can be considered securities, meaning they would fall under laws that require disclosures and are subject to regulatory scrutiny to protect investors, unless a “valid exemption” applies.

Some industry participants and analysts had thought such a decision would have a chilling effect on the ICO market. But 20 new ICOs were announced since the SEC’s decision, with more than 120 scheduled to launch this year, according to ICO tracker tokendata.io.

Representatives of Rivetz and ICOBox, which plan to launch tokens over the next few weeks, told Reuters they are pushing through with their offerings.

During an ICO, contributors typically send digital currencies like Bitcoin and receive new tokens in return. Those tokens are then listed on cryptocurrency exchanges where they can be traded for other types of tokens. (reut.rs/2sFKLAm)

Even as some ICOs have been criticized for failing to disclose information about underlying businesses and the way tokens are distributed, the frenzy surrounding the events has drawn backing from prominent venture capitalists and celebrities.

Boxing champion Floyd Mayweather took to Facebook on Thursday to say he was participating in the ICO of a company called STX technologies Ltd next week.

POTENTIAL EXEMPTIONS

But even with the SEC’s warning, it is not clear how much regulatory scrutiny the upcoming offerings will attract. Unlike a regular securities offering, ICOs have had limited disclosures and most participants do not get any equity rights.

The most likely exemption to the SEC rule refers to tokens that would have utility for a specific project. Many tech companies that pursue ICOs say their tokens are just that: “utility tokens,” which are necessary to activate their products or accelerate their development.

Both Rivetz Chief Executive Officer Steven Sprague and ICOBox founder Nick Evdokimov told Reuters their ICOs have a utility.

Charley Cooper, managing director of R3, a consortium of banks looking at using the technology behind digital currencies, said companies looking at ICOs needed to be certain the exemption applied to them.

“Anyone is who is contemplating doing an ICO now had better call their general counsel and fully understand securities laws in the U.S. and how they apply in their case,” he said.

“This wasn’t some vague policy that they floated. This is the division of enforcement of the SEC saying that if you operate in this market you need to follow the regulations.”

The SEC ruling also raises questions for digital currency exchanges such as Bittrex that facilitate trading after an ICO.

Crypto-exchanges may be required to register with the SEC if they trade tokens considered securities and are based in the United States or have U.S. customers, said Llew Claasen, managing director, at venture capital firm Newtown Partners.

Bill Shihara, chief executive officer of U.S.-based Bittrex, said he sees no need to register his exchange with the SEC because it does not plan to trade securities on its platform, only utility tokens.

“If the facts and circumstances of a token change and lead us to conclude it is a security, we will delist it from the exchange.”