One of the biggest challenges we face in our times is that technology and marketing move much faster than the legal system’s ability to enact and enforce new laws and regulations, and this is especially the case with cryptocurrencies and ICOs.
This is especially the case with ICOs, or initial coin offerings. Initial coin offerings issue tokens, and in theory, these become exchangeable for money or cryptocurrencies such as Bitcoin and Ethereum when the funding goal is achieved, usually through crowdsourcing. Until very recently, they have become a quick and easy way to circumvent regulatory compliance. ICO proponents have argued that SEC and compliance regulations add to costs, and make it much more difficult to raise money.
However, too many people jumped on the ICO bandwagon, and made too much noise, which has attracted government attention. China and South Korea have moved to ban crypto-exchanges.
The US’s SEC (Securities Exchange Commission) has been constricted by budgetary constraints, and has moved slower than other governments. The Trump administration is strongly pro-business and has argued that the less government regulation of the finance industry, the better. This is a philosophy shared by many members and supporters of the conservative wing of the Republican Party, which is why Congress has put budgetary limits on the SEC’s investigatory powers.
