Cornell University Professor Emin Gun Sirer said that ICO guidelines issued by the US Securities and Exchange Commission (SEC) in late July 2017 will have a “chilling effect” on Blockchain technology innovations.

Sirer claimed that the guidance could have an effect similar to the collapse of The DAO project:

"This portends the end of the beginning for Blockchains. We can no longer count on regulators not understanding what a Blockchain is, nor can people use the veneer of a block-oriented data structure to subvert the law. In turn, it represents public acceptance of on-chain financial instruments as being equivalent to traditional ones."

The DAO Project was both a digital decentralized autonomous association and a form of investor-managed venture capital fund. The aim of the project was to introduce a new decentralized form of business model establishing both commercial and nonprofit enterprises. The project had no traditional management or board of directors and was instantiated on Ethereum technology.

Sirer was among the first who issued warnings about the flaws or vulnerabilities that led to the collapse of the project. He focused on the issues over the project’s voting mechanisms, as well as the possibilities of cyber attacks that could be made against its code. The attacks eventually happened which caught the SEC attention.

Despite his warnings on the ICO guidance, Sirer, however, said that the cryptocurrency market can overcome its challenges.

He also said that the guidance will lead to a sustainable and long-lasting project development in the industry:

"In the next chapter, we will see the cryptocurrency community focus more on its competency and innovative technology, and less on disguised financial instruments, and we will see the financial incumbents challenged by fundamentally innovative technology that can do what has never been done."