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Statement on Cryptocurrencies and Initial Coin Offerings

Abstract: 
With the increase in prevalence of the cryptocurrency market, which is purported to be free from government regulation, there is much opportunity for fraud to occur. The SEC released a statement about increasing their involvement with the regulation of entities who release new forms of cryptocurrency (focusing on future releases, rather than existing ones like Bitcoin). The main takeaway is to consider the situations in which the cryptocurrency falls under our definition of a security, rather than simply a currency. Depending on the market, it's very clear that cryptocurrency is a security in that participants buy into it under the notion that there is potential for profit given the volatile exchange rates. It essentially acts like a stock.
Author: 
Jay Clayton
Institution: 
U.S. Securities and Exchange Commission
Year: 
2017
Domains-Issue Area: 
Industry Focus: 
Internet & Cyberspace
Country: 
United States
Datatype(s): 
Policies