An undisclosed number of ICOs including tZero have become the object of a probe from the US-based Securities and Exchange Commission (SEC).
SEC Follows Through On Previous Comments
Initial reports of the enquiry surfaced in this weeks Wall Street Journal who would only cite their source as “people familiar with the matter.”
The news follows last month’s Senate Committee hearing where the SEC Chair, Jay Clayton, stated that he believed the majority of ICOs qualify as securities, and therefore falling under existing securities regulation.
Before going on to clarify that no ICOs had so far been registered as securities with the SEC, Mr Clayton said, “You can call it a coin, but if it functions as a security, it is a security.”
In a restated version of their private placement memorandum (PPM) filed with the SEC yesterday, Overstock, who are currently in the middle of their tZERO token private sale, said they are one of the companies co-operating with the SEC’s enforcement division and have been requested to provide “certain documents related to the offering and the tokens.”
In playing down the investigation, Overstock made clear that the SEC had not concluded anyone had broken the law and “does not mean that the SEC has a negative opinion of any person, entity, or security.”
The PPM also noted that the broker-dealer subsidiaries associated with the tZERO ICO are being investigated by SEC and the Financial Industry Regulatory Authority (FINRA).
Pro Securities were notified a week ago that the SEC is examining their practices and FINRA has, over the course of the last 3 months, requested SpeedRoute to produce documents relating to the investigation.
[Editor: a previous revision of this article incorrectly implied that subpoena proceedings were underway in relation to the subject discussed within the article itself – we have removed this wording, apologise for any offence caused and are reviewing our editorial workflow as a result]