The United States Securities and Exchange Commission’s (SEC) Advisor for Digital Assets and Innovation Valerie Szczepanik said that platforms seeking to list initial exchange offering (IEO) tokens for a fee could find themselves in regulatory trouble. Szczepanik delivered her comments at the Consensus 2019 conference on May 13.

Speaking on IEO, Szczepanik — also known as the commission’s “crypto czar” — argued that platforms seeking to list IEO tokens for a fee and attract buyers for an issuer are likely engaging in broker-dealer activity. Szczepanik said:

“If they are not registered they will find themselves in trouble in the U.S., if they have a U.S. issuer or U.S. buyers, if they are operating on the U.S. market.”

Szczepanik further mentioned the case of TokenLot last September, — a cryptocurrency broker-dealer lead by Lenny Kugel and Eli L. Lewitt that marketed itself an “ICO [initial coin offering] superstore” — and said that “it was instructive in this regard.” She stated:

“This was a platform that was assisting to bring buyers to ICOs [...] In that case, there was an enforcement action charging the platform with acting as a unregistered broker-dealer and participating in the distribution in violation of the registration provisions.”

At the time, the SEC’s alleged that Kugel and Lewitt broke the law by failing to register their business in the country. TokenLot agreed to pay a $471,000 fine but did not admit or deny the findings.

In early April, the SEC published a framework, developed by Szczepanik and another Commissioner Bill Hinman, to help market participants ascertain whether or not a digital asset is deemed to be an investment contract, and therefore a security. The framework is intended to serve as an analytical tool that will help operators of ICO and token issuers determine whether their offering is likely to fall subject to federal securities laws.

Szczepanik has previously indicated that assets in the rapidly-growing stablecoin sector could experience issues under existing securities laws.

Cryptos feed

Latest Crypto News & Analysis

Editors’ Picks

Cryptocurrency market update: Ripple, NEO and Monero dump as altcoins' short-lived boom takes a breather

The cryptocurrency market is back to the recent default settings; painted red everywhere. This comes after corrected higher three days in arrow. Ethereum, the largest altcoin in the market tested $215 resistance.

More Cryptocurrencies News

Monero price analysis: XMR/USD reverses Wednesday’s gains, goes below $74.0

Monero (XMR) is one of the biggest losers among top-20 coins. XMR/USD has lost nearly 10% since the beginning of Thursday to trade at $73.64 by press time.

More Monero News

Ripple market overview: XRP/USD goodbye $0.32, hello $0.28

Ripple is making a comeback into the rags just as quickly as it ascended to the riches. The gains accrued from earlier in the week majestically cleared multiple resistance levels starting with the simple moving averages.

More Ripple News

TRON market update: TRX/USD collapses below $0.0170, loses over 4% in a matter of hours

TRON (TRX) has partially reversed Wednesday’s gains amid global correction on the cryptocurrency markets. TRX/USD has lost over 4.5% of its value to trade at $0.0166 by press time.

More Tron News


Bitcoin Weekly Forecast: Rangebound trading and September blues come upon the crypto market

Bitcoin finishes the week with marginal losses. The first digital currency recovered from the recent low of $9,886 but stayed in the red zone as of the end of the week.

Read the weekly forecast