“Securities lawsuits filed over either cryptocurrencies or bitcoin have tripled,” states the US-based National Law Journal, in a report which places the increase at the door of the SEC which has been cracking down specifically on ICOs that have been refusing to declare as security issues.
The numbers compiled by the NLJ are modest in absolute terms but do appear to show a striking increase in relative terms. In Q2 of 2017, only two cases of cryptocurrency-related lawsuits had been recorded, but that number rose to 23 for the corresponding period in 2018.
The research has been compiled by law firm Lex Machina who appear to have derived their statistics from a string search of the terms “cryptocurrencies”, “blockchain” or “bitcoin” in litigation filings, and are likely to align with the exponential increase in numbers of ICOs that has been occurring over the last eighteen months.
The SEC has asserted on a number of occasions that it sees current securities legislation as adequate for the ICO fundraising model, although it did take the unusual step in May of appointing Valerie Szczepanik as Senior Advisor for Digital Assets and Innovation, who has since been referred to as the regulatory body’s “Crypto Tsar”.
However, some observers believe the question of a specific legal framework for ICOs in the US will need to be addressed sooner rather than later, particularly as it runs the risk of seeing other countries – notably France which introduced its own ICO specific legislation last week – of capturing a market in which legal ambiguity has been a defining feature since the rise of the ICO as a mass phenomenon in mid-2017.