Venture Capital Working Group met on March 28 and is asking the U.S. SEC to consider a safe harbor where some cryptocurrencies are considering a safe from securities regulations given their structure and manner of formation.
Venture Capital Working Group, which is a group of investors and lawyers, has asked the U.S. Security Exchange Commissions not to categorize cryptocurrencies as securities. It is asking SEC for a Safe Harbor where some virtual currencies fall into “utility tokens” classification instead of securities.
The group comprises of the two largest capital venture investment firms in the digital currency industry. Thus, namely Andreessen Horowitz and Union Square Ventures. The group met on March 28 to lobby against the definition of cryptocurrencies as securities.
The group argues that cryptocurrencies issued not through an ICO such as Bitcoin where users also create them via mining, do not qualify the securities classification. Thus they would be safe from regulation. And since SEC sees an ICO as the key to defining cryptocurrency as a security, cryptocurrencies such as Ethereum can fall under the “securities” description. It depends on whether there was an ICO, payment method, decentralized from its issuer. And whether the ICO acts solely as an investment of value.
SEC is insisting that cryptocurrencies fall under the securities tag and must abide by the relevant law. Richard Levin, a lawyer at the firm Polsinelli said many firms in cryptocurrency industry are now beginning to see that they are subject to that regulation. Some are already registering their tokens as securities.Still, the policies for regulating cryptocurrencies are unclear from the SEC.