Tangled Up in Blue: Adapting Securities Laws to Initial Coin Offerings
Trotz, Ethan D.
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Issuers of blockchain-based projects have increasingly turned to Initial Coin Offerings to raise capital. Many of these offerings have similar characteristics to securities offerings, yet are often not registered or exempt from securities laws. Initial Coin Offerings present numerous risks to investors, including fraud, inadequate disclosures, and a lack of remedies. The Securities & Exchange Commission must step in to protect investors and limit losses. One way to do so is through regulation. The Securities & Exchange Commission should use existing regulations for Initial Public Offerings and securities offerings as a guideline. However, blockchain-based offerings present unique issues never before observed in securities offerings. As a result, the Securities & Exchange Commission must adapt existing regulations and consider these unique issues when devising regulation. In doing so, the United States will position itself as a global leader in cryptocurrency regulation, providing safety to investors and clarity to issuers.