At a recent securities regulation conference, Bill Hinman, Director of the SEC’s Division of Corporation Finance, indicated that the agency intends to release “plain English” guidance around the issue of whether an ICO is a security. The SEC has provided guidance on these issues in its DAO Report and Hinman’s own prior speech, and as we have frequently blogged, has been actively enforcing perceived violations of the federal securities laws. The idea behind the plain English guidance appears to be to consolidate the SEC staff’s views into a single “how to” document for use by the lay person.
As part of the process, Hinman indicated that the SEC staff is considering various issues around ICOs and other digital securities, including valuation, disclosure, accounting, custody and secondary trading. Hinman acknowledged a backlog of filings by parties seeking to conduct registered offerings with the SEC, and observed that the staff is processing them slowly due to the novel and unique issues they raise. While he did not commit to a set publication date, Hinman estimated that the new guidance would be released by early 2019.