I have not heard too much talk regarding the recent (July 25th, 2017) release of the DAO Investigative Report. It clearly states that US citizens who participate in ICOs that are considered securities can be legally held liable. I understand no charges were brought in this case in particular, but what does this mean for US citizens who invested into other ICOs?
Full report:
https://www.sec.gov/litigation/investreport/34-81207.pdf US Investors held liable: http://imgur.com/a/IcNYx
Recently the SEC declared the DAO as securities:
https://www.sec.gov/news/press-release/2017-131 Basically this means that they are subject to the agencies regulations. From their standpoint, these tokens are a form of shares and selling them without licenses violates federal securities laws. Many people who were unable to access ICOs because of geo-restrictions used VPNs. From my knowledge, the reasons ICO providers prevented US citizens from participating was to protect themselves legally from the United States government. That is true, but also note that the investor themselves can be at fault as well.
Reference this thread by Marco Santori, who is well known when it comes to law and cryptocurrency. He had this to say about the recent SEC statements. Please pay close attention to #6. Let me know your thoughts!
https://twitter.com/msantoriESQ/status/890200014370287620 https://twitter.com/msantoriESQ/status/890187373828616192I disagree the US investors are held liable. I am referring to the Murphy matter you cited at
http://imgur.com/a/IcNYxIn
Murphy the term "particpant" was referring to the actor that conducted the unregistered securities offering. Murphy was not the investor but a participant in the illegal securities offering
as an actor.
I also don't believe that the comment #6 means your liable if you buy in an ICO that was deemed a securities offering but whether you go to resale the token that has been since deemed a security. This is why ICO issuers are most likely barring US investors from offerings unless they feel comfortable meeting
Howey test.
Full disclosure, I am an attorney practicing securities arbitration. The foregoing is not intended to be legal advice and no attorney-client relationship is implied.
I am glad to see an attorney here. Please continue on sharing your opinions and ideas on this forum as it is really different to hear from someone who is more qualified to talk about securities. I agree with the fact that investors should not be held liable if they are able to buy an ICO which can be classified as a security by nature. With that issuance clarifying things once and for all as to what constitute a security, we are hoping that people can be guided and ICOs would be more scrutinized.