Debevoise & Plimpton Discusses Developments in the Enforcement of Token Sales

Securities and Exchange Commission (“SEC”) Chairman Jay Clayton recently discussed the uncertainties surrounding token offerings and other forms of distributed ledger-based financing.[1] Mr. Clayton cautioned that the lack of information regarding online platforms that list and trade virtual coins or tokens may lead to price manipulation and other fraudulent trading practices on these platforms. The Chairman stated, “The [SEC] recently warned that instruments such as ‘tokens’ offered and sold in ICOs may be securities, and those who offer and sell securities in the United States must comply with the federal securities laws.” The Chairman’s statements regarding token sales reiterate … Read more