As a growing number of companies and industries involved in cryptocurrency weigh in SEC’s latest decision, US retailer Overstock has lauded the ruling body in its decision to regulate the trading of initial coin offerings (ICO).
In its mid-2017 report, the SEC said that once a digital token issued in an ICO is considered as a security, its trading should only be participated in by national securities exchanges such as Nasdaq and some alternative trading systems (ATS).
Overstock.com’s involvement in regulated ICOs
The retail giant has already established its regulated, Blockchain-powered stock exchange called tO, which is involved in the selling of tokenized and compliant securities. The exchange has successfully traded the first SEC-regulated crypto securities in December 2016.
However, the promise of a new era of regulated Blockchain securities was abruptly cut short by the emergence of the wildly popular concept called an ICO. An ICO is an unregulated means of raising funds for a certain project using cryptocurrencies. It is aimed at cutting out licensed platform providers like tO and the regulators altogether.
In his comment on the emergence of ICOs, tO President Joseph Cammarata said that he compares the ICOs to the Wild West:
"We were kind of annoyed when these ICOs started taking off. They weren't getting approval, it was the Wild West. We thought long and hard about doing our own ICO ... But we held off, going down the regulatory road."
Other regulated ICOs
The concept of regulated ICOs in which there are no middlemen involved in the trading is gradually being advanced in the financial services industry.
In early 2017, Blockchain Capital has raised $10 mln of a $50 mln fund through the sale of its tokenized securities. The company exploited the same JOBS Act exemptions cited in the SEC report in conducting its regulated ICO.
Several ICOs are also looking to advance compliance projects and are already in the works as of mid-2017.