A member of Congress has called for a ban ICO

US Congressman called for a ban on primary placements of tokens (ICO) during a hearing on Thursday. The proposal came from a member of the house of representatives from district of California brad Sherman (Brad Sherman).

He made a statement after William Hinman (Hinman William), Director of the securities and exchanges in the field of corporate Finance, made
before the Subcommittee on securities and investment. Hinman, told the Committee that his division «is committed to a balanced approach» when it comes to cryptocurrency and ICO.

Sherman opposed this position and stated that the sale of tokens detrimental to the economy.

«The objective of securities markets is to create jobs in the real economy,» said Sherman. «IPO cope with this task, and ICO are working in the opposite direction. They take the money from the real economy».

Hinman, noted that the technology of the blockchain, the underlying ICO, provides a great opportunity. Sherman replied:

«I don’t propose to ban the blockchain. I advocate a ban ICO».

Hinman, noted that in the opinion of many tools ICO allows you to create a new company type is more decentralized and has value. Further in his remarks, the Sherman turned to bitcoin. He said that «bitcoin is a security because it’s an investment». This comment is notable because the SEC is clearly a different position on this issue. In November, the Chairman of the Commission J. Clayton said that, although token-ICO are likely to qualify as securities, bitcoin under this classification does not fall.

«If not to take into consideration bitcoin and ether, and talk about all of the other tokens, the situation with the company’s securities immediately clear,» said
Clayton in an interview with the Wall Street Journal.

Senior analyst Digital Asset Research Matt Gertler (Matt Gertler) commented on this situation and said that bitcoin does not meet the definition of securities, proposed by the Supreme court.

«The first paragraph of the test Howie for investment funds. Given the fact that all bitcoins have been mined and not sold for money at issue, it is unclear exactly how bitcoin is a security, in accordance with this test».

Not so bad

However, not everyone at the hearing reacted to ICO hostile. A member of the house of representatives from Minnesota Tom Emmer (Tom Emmer) criticized his colleague for «a lack of understanding of how special this area». The enthusiasm of Emmer against cryptocurrency – is not news. During the discussion of regulation of cryptocurrency and ICO in the U.S. Congress in March this year, Emmer said that the need to avoid excessive regulation of the industry.

At the hearing on Friday, Emmer asked Hermana, it is possible such a situation in which the sale of tokens will not «constitute an offer of securities».

«It’s hard to make an initial placement of tokens is not offering securities,» said Hinman. «That’s why the Chairman of the SEC noted that the initial placement of these products may require compliance with laws or be considered as an exception».

Emmer also raised the issue of the tool tokens, which, according to supporters of the ICO, should not be regulated as securities because they are designed to facilitate the use of the network on the basis of the blockchain and not for investment.

«Of course, we can imagine a token that its owner acquires for its instrumental quality, and not as an investment,» said Hinman.

Hinman, further suggested that the SEC will consider all the circumstances relating to the token, «especially if we are talking about a decentralized network».

«The issues related to whether a particular sale is a token offer of securities is very complex,» said Hinman, Chairman bill Huizenga (Bill Huizenga). He also noted that the goal of his unit was «not to stifle innovation.»

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