Initial Coin Offerings “Horrify” a Former SEC Commissioner

By Robert Crea

On Sunday, November 26, 2017, the New York Times published an interview with Joseph Grundfest, former SEC Commissioner and current Stanford law professor.  Professor Grundfest is sharply critical of the posture of initial coin offerings under U.S. federal securities laws.  Given his persuasive voice on securities law matters and his influence in Silicon Valley, this interview may very well serve as a sobering wakeup call to the ICO marketplace.

Some notable quotes:

  • “ICOs represent the most pervasive, open and notorious violation of federal securities laws since the Code of Hammurabi. . . .It’s more than the extent of the violation . . . . It’s the almost comedic quality of the violation.”
  • “These are not hard cases . . . . You don’t need teams of accountants poring over complex financing documents [to bring enforcement actions].”
  • “We’re waiting to see a whole bunch of enforcement actions in this space, and we wonder why they haven’t happened yet. . . .I hope what [the SEC is] doing is planning on a sweep of 50 ICOs.”

The article may be found here.

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