The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Sat, 22 May 2021 13:39:52 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.1 SEC Enforcement Against Initial Coin Offering https://corpgov.law.harvard.edu/2017/10/30/sec-enforcement-against-initial-coin-offering/ https://corpgov.law.harvard.edu/2017/10/30/sec-enforcement-against-initial-coin-offering/#respond Mon, 30 Oct 2017 13:06:00 +0000 https://corpgov.law.harvard.edu/?p=102476?d=20171030090621EDT Posted by Steve Gatti, Megan Gordon, and Daniel Silver, Clifford Chance, on Monday, October 30, 2017
Editor's Note: Steve Gatti, Megan Gordon, and Daniel Silver are partners at Clifford Chance. This post is based on a Clifford Chance publication by Mr. Gatti, Ms. Gordon, Mr. Silver, Philip Angeloff, Benjamin Berringer, and Allein Sabel.

On September 29, 2017, the United States Securities and Exchange Commission (“SEC”) brought its first enforcement action arising from an Initial Coin Offering (“ICO”). This action is the latest sign that the SEC will be carefully scrutinizing the ICO market and transactions involving ICOs.

What Is An ICO

An ICO is a fundraising event, effected using distributed ledger technology, in which a “token” or “coin” is offered to a participant in return for either cash (fiat currency) or cryptocurrency, such as Ether or Bitcoin. A token entitles its holders to various rights, which typically include the right to use a service to be developed and offered by the issuer. The proceeds of the token sale are used to fund a venture or a project undertaken by the ICO sponsors.

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