The Securities and Exchange Commission has again delayed the issuance of rules on initial coin offerings and sale of cryptocurrencies to the second half of 2019.
SEC chairperson Emilio Aquino said in an interview the corporate regulator wanted to thoroughly review the new ICO rules that would pave the way for the legal sale of cryptocurrencies in the country, citing they could be used as another form of investment scams.
“We want that out (ICO rules) because these are additional investment products. But we are also concerned because some investment scams are saying that they are into cryptocurrencies. So we may be adding more problems and we don’t want to do that,” Aquino said. “But definitely we want that out soonest.”
ICOs refer to the distributed ledger technology fundraising operations involving the issuance of tokens in return for cash, other cryptocurrencies or other assets. They involve coins (or tokens) being issued in order to raise money from the general public through online platforms.
The SEC earlier warned the public about investing in several companies engaged in selling cryptocurrencies, which are not registered with the corporate regulator.
The SEC initially planned to finalize the ICO rules in 2018. However, it decided to defer it to the second quarter of 2019 pending further public consultations.
Under the draft circular issued in August, the SEC will assess an ICO in two stages—the initial assessment and registration proper.
The initial assessment will require ICO proponents to prove that the tokens were not security tokens. Security tokens are defined as “payment, utility, and/or asset tokens that satisfy the definition of securities under the Securities Regulation Code, its implementing rules and regulations, and other issuances of the SEC.”
Several ICOs conducted prior to the release of the draft rules claimed that the tokens issued were not securities and should not be under the jurisdiction of the SEC.