The Wall Street Journal | By: Paul Vigna and Dave Michaels | Updated July 25, 2017:
At issue is sector where more than $1 billion has been raised this year but which has been criticized for lacking standards.
The Securities and Exchange Commission on Tuesday moved to restrain a hot new fundraising method involving sales of digital coins, saying rules meant for everyday stock sales may apply to these offerings, too.
The comments were the first from the SEC specifically to address initial coin offerings, a nascent area where more than $1 billion has been raised so far this year, but which has also been criticized for a lack of standards.
The SEC’s report will likely “chill the waters a bit for these offerings,” said David B.H. Martin, a senior counsel at Covington & Burling LLP who was formerly a top SEC official.
The price of bitcoin and ether, the two most popular cryptocurrencies, fell on the announcement. Bitcoin lost 7% of its value, trading at $2,592. Ether was also down 12% to $201, according to CoinDesk.
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