SEC Statement on Digital Asset Securities Issuance and Trading

Having seen significant advances in technologies in recent years – including blockchain and other distributed ledger technologies – that impact our securities markets, this SEC’s statement from multiple Divisions highlights several recent SEC enforcement actions involving the intersection of long-standing applications of our federal securities laws and new technologies.

The Commission's Divisions of Corporation Finance, Investment Management, and Trading and Markets (the "Divisions") encourage technological innovations that benefit investors but wish to emphasize, however, that market participants must still adhere to well-established and well-functioning federal securities law framework when dealing with technological innovations, regardless of whether the securities are issued in certificated form or using new technologies, such as blockchain.

The Commission's recent enforcement actions involving AirFox, Paragon, Crypto Asset Management, TokenLot, and EtherDelta's founder, discussed within the Statement illustrate the importance of complying with these requirements. Broadly speaking, the issues raised in these actions fall into three categories: 

(1) initial offers and sales of digital asset securities (including those issued in initial coin offerings ("ICOs"));

(2) investment vehicles investing in digital asset securities and those who advise others about investing in these securities; and

(3) secondary market trading of digital asset securities. Below, we provide the Divisions' views on these issues.