Security regulators in Massachusetts have put a stop to five different parties where were conducting initial coin offering within the state in a fight against “unregistered securities” under the lead of William Galvin, the secretary of the commonwealth in Massachusets.
Galvin’s office ordered the stop on Mattervest Inc, Pink Ribbon ICO, Across Platforms Inc, Sparkco Inc, and 18 Moons. As of now the companies been silent on the matter, with the Pink Ribbon ICO Facebook page displaying a message that it is unavailable.
Each of these firms listed themselves within Massachusetts as their place of business or were incorporated within the state and advertised themselves online through various popular social media channels such as Twitter, Reddit, Youtube, and Facebook.
Yet, the individuals behind these campaigns were not registered with Galvin and his office to be able to sell securities. Galvin has a negative view of such companies saying:
“An offering done to avoid registration with regulators should be seen as a red flag, and you should contact my office before investing.”
Debate Around ICOs and Securities Regulation Heats Up
The debate on whether ICOs should be considered securities or not as far as regulations are concerned has been heating up lately, with recent months showing more and more firms such as these getting shut down by regulators.
Galvin has a point though, because back in February the U.S. Securities and Exchange Commision Chair, Jay Clayton, said that he sees most digital coins as currencies as securities and that initial probes show that many coins are breaching these rules. Furthermore social media and tech platforms are starting their crackdown as well, with Twitter banning cryptocurrency advertising joining along with Facebook and Google.
The public-at-large should take note, that there is a difference between these potentially fraudulent players at crypto-technology as a whole. Blockchain technology and its associated cryptocurrencies are excellent tools that will continue to advance ever forward into the tech world, but associating these fly-by-night startups with rule-abiding and coherent ones is not good for anyone.
The best thing to take out of news such as this, however, is that though regulations may not be the ideal for everyone’s interest, there is at least some consistency starting to show from the way in which the US government handles crypto-based securities.