Notable events occurred during the past two weeks that are worth talking about. The first event even though it was noticed, did not get the attention it required. The second occurred recently on May 3rd and will most likely draw some attention in the coming days after people get to understand its consequences.
The first event is the speech of former CFTC Chairman Gary Gensler at the MIT Technology Review Business of Blockchain on April 23. Gensler supported the SEC decision on ICOs stating that “Many initial coin offerings, probably well over a thousand, many crypto exchanges, probably 100 to 200, are basically operating outside of US law.” He added that he expects that “2018 is the year to start bringing into compliance this sort of 1000 plus tokens” and that “when and not if, is the only question.”
He went further to state that excluding bitcoin, bitcoin-cash, and litecoin which are not securities, Ripple, Ethereum, NEO, and EOS might rightfully be referred to as securities.
The second event which occurred on May 3rd was related to the lawsuit filed against XRP II LLC, Ripple Labs and its CEO Garlinghouse for the supposed unregistered sale and offer of securities going against the US Securities Act and the California Corporate Code.
It is important to understand the implication of this to the sector.
There are two sides to this: firstly is how regulators will react and second is to understand the implication of regulator’s decision.
However, the next ban is only one side of the coin that people are focusing on, but it definitely not the most important or even what will greatly affect the market.
The second aspect is likely most important and it is the impact of lawsuits that the regulator’s decision will stir. Every investor who made losses now has the legal power to sue and remain his money given that the ICOs did not go in accordance with applicable Securities laws.