Initial Coin Offerings: The Badlands Between Innovation and Regulation

Regulation is inherently reactive, and is an intrinsic response to innovation. The natural cycle of regulation begins with innovation, which is often misunderstood and foreign to regulators, and is followed by a period of bureaucratic interpretation and finally by enforcement. The SEC is now prepared to aggressively tackle the issues/violations associated with ICOs, hence the ramping up of the enforcement phase. The sequence of events starting with the DAO report, and culminating in the subpoena sweep of ICO issuers and service providers, follows the typical enforcement cycle. It is not a question of if, but when regulation will be applied and enforced. The industry should be prepared for the waves of enforcement actions and criminal proceedings coming its way.

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