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It was a bit of a solemn day yesterday.

The SEC stepped into the Crypto realm and stated something quite obvious: "DAO Tokens, a Digital Asset, Were Securities"

This report the published was not an enforcement letter, it was simply an investigative report.

Quite frankly, from the SEC's perspective, it was brilliant. The SEC's whole purpose is to protect U.S. investors. We are in the midst of a huge, billion dollar ICO bubble, with presumably hundreds of millions of dollars of U.S. investors' dollars at stake.

While I expected the SEC to immediately lash out and shut down some of the more unscrupulous actors in the space, their incredibly measured reaction showed some great strategy.

The most important point of their report is as follows (I know it is long but it going to be the most important quote affecting the crypto community this year):

"In addition, any entity or person engaging in the activities of an exchange, such as bringing together the orders for securities of multiple buyers and sellers using established nondiscretionary methods under which such orders interact with each other and buyers and sellers entering such orders agree upon the terms of the trade, must register as a national securities exchange or operate pursuant to an exemption from such registration."

This means that the SEC is telling exchanges directly that if they list any digital assets on their exchanges that qualify as securities they need to register as a national securities exchange.

The cost to do so is enormous. Without even taking any enforcement action against anyone in the space the SEC has found a route to dry up the ICO market (or at least the scummiest side of it).

With this advisement, at least in the U.S. there will be a major slowdown in ICOs.

This allows U.S. investors to exit the market without crashing the market.

This also slowly cuts off the chance that more U.S. investors get hooked into the ICO market.

By cutting off the 'action' in the market at the source (exchanges) the SEC has done their duty to ensure that U.S. investors are not harmed by ICOs.

Brilliant.

Two thoughts moving forward though:

1: ICOs will just move overseas. Probably going to happen. I wouldn't be surprised to see a new Polo/Bittrex competitor located overseas.

2: Where in god's name do distributed or decentralized exchanges fit into this?

Ripple's XRP ledger has a decentralized exchange function. Users can trade any IOU listed by a gateway or an individual against XRP or any other currency code. Could we see a future where all of Polo's volume is moved to Ripple's decentralized exchange?

Anyways, the last point I am here to make, with this SEC report, and especially with the qualifications they make to call the DAO a security, I am going to refund all of the (small amount) of XRP I received from my ICO.

If you're feeling generous and want to donate (WITH NO EXPECTATION OF A TOKEN, ICO SALE, OR ANYTHING ELSE IN RETURN, THIS IS NOT AN OFFER OR SOLICATION TO SELL A SECURITY, THIS IS MY BEER FUND) feel free to shoot me a donation at rJonHQpZ1XcNgh8sAcenBC1YzFejrzdwSn.

It's been a wild journey with you all and I'm still all aboard the PRX train but because of where I live, even the small like, 0.0001% chance that I face legal action for my experiment just doesn't make it worth it.

Once this post is published I will begin the refund process.

Buy a beer on me.

Cheers!