Former SEC Commissioner: Initial Coin Offerings “Open and Notorious Violation” of Law

“ICOs represent the most pervasive, open and notorious violation of federal securities laws since the Code of Hammurabi,” an outraged former commissioner of the Securities and Exchange Commission (SEC) told the New York Times in a recent interview. And at least this much is true: regulators around the world find it maddening that a multi-billion USD market has popped up … without their permission.

SEC Under Pressure from One of its Own

“It’s more than the extent of the violation,” Joseph Grundfest continued. “It’s the almost comedic quality of the violation.”

Mr. Grundfest is a former SEC commissioner appointed in the 1980s by President Reagan.

ICOs are modeled after initial public offerings, but instead of shares of stock investors are holders of digital coins, tokens, which they can use sometimes in commerce or trade (buy and sell). They’re a finance vehicle operating largely as an end-run around legacy banking and mainstream exchanges — often friction-filled with legal and regulatory restrictions, acting as barriers to entry for smaller startups…

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