From its beginning, the ICO market has attracted huge amounts of finances from investors all over the world, with most not having the appropriate accreditation. It was only a matter of time for the implementation of regulation towards this type of investment to occur.



In July 2017, the Securities and Exchange Commission (SEC), the main body exercising the functions of supervising and regulating the US stock market since 1934, was the first to announce its intention to bring order into digital investments by establishing that the US securities laws are now applied to the primary placement of coins.

Thus, in addition to the main role of the organization, which is to monitor compliance with the US securities laws in the investment market, the role of the regulator of all token sales to American residents was also gained.



The Commission’s attention is attracted by projects in tokenomics, where there is promise to token holders of possible profit in the future. Coins of such projects acquire the status of a security instead of the usual official function of the ICO token, and therefore must be regulated by existing legislation.

The first step and the additional task of the regulator (SEC) was prevention of unqualified investors from the possible participation in tokens acquisition, which directly or indirectly possesses the status of a security.

In other words, security tokens can be purchased only as part of a private offer to accredited investors on an equal basis with other securities. Public sale of “security tokens” to an unqualified investor is prohibited in America!



The Commission itself provides more detailed information on its functions and mission on the official website https://www.sec.gov :

“The SEC protects investors, promotes fairness in the securities markets, and shares information about companies and investment professionals to help investors make informed decisions and invest with confidence.”



The root cause for the application of securities legislation to the ICO market was the huge number of previously deceived investors involved in various legal proceedings concerning investments which did not meet the expectations of investors. In this regard, keeping most of these crypto enthusiasts from participating in the upcoming STO (security token offering) was the best and simplest decision of the Commission.



The US securities market in itself is of great interest, and the acquisition of the security function by tokens means that access to this market is open to anyone wishing to enter which, of course, was never the intention of the US law. The only possible moment for the STO to become legitimate is the day when the constitution of the Commission (SEC) recognizes an unaccredited investor as being on apar with an accredited investor whose equity capital is at least 1,000,000 USD (according to current US legislation).

For now, one may only imagine when this would happen. Tell us your thoughts in the comment section below!