There may a storm brewing for shady companies intent on jumping on the blockchain bandwagon. Startups with no working product seeking to raise millions, or traditional companies rebranding themselves as blockchain connoisseurs are liable to attract the ire of the U.S. Securities and Exchange Commission. In a speech delivered in Washington on Monday, SEC chairman Jay Clayton made it evident that “blockchain squatting” will no longer be tolerated.
Clayton Lays Into Bad Lawyers
The last six months have witnessed a spate of traditional companies adopting the blockchain moniker in a bid to make themselves relevant and to shore up sagging share prices. Sometimes, as in the case of Kodak, those companies have halfheartedly committed to an ICO. And at other times, as in the case of the Long Blockchain Corporation (formerly the Long Island Iced Tea Corp), there’s not even been the slightest attempt to actually do anything with blockchain technology.
In a speech delivered on Monday, SEC chairman Jay Clayton made no bones about the absolute state of the crypto space, opening his remarks by saying:
Market professionals, especially gatekeepers, need to act responsibly and hold themselves to high standards. To be blunt, from what I have seen recently, particularly in the initial coin offering (“ICO”) space, they can do better. Most disturbing to me, there are ICOs where the lawyers involved appear to be, on the one hand, assisting promoters in structuring offerings of products that have many of the key features of a securities offering, but call it an “ICO,” which sounds pretty Read More Here