The SEC Wants to Expand the Definition of the Accredited Investor

The United States Securities Exchange Commission (SEC) has submitted a proposal regarding its definition of „accredited investor“ as well as „qualified institutional buyer“ that would expand the list of people and institutions currently allowed to invest. This could potentially benefit companies that are hesitant to meet full public reporting requirements.

The news was made public on the SEC’s website, where it is stated that the financial regulator was currently looking for commentary from the public on its proposed amendments regarding the above mentioned categories.

The submitted proposal would expand the number of people allowed to invest in private securities, offerings, hedge funds as well as privet-equity funds. At the moment, the regulator defines an accredited investor as an individual with a net worth of over $1 million or earning more than §200,000 in annual income. In addition to that, other means of classifying include being an executive at the company making the offering.

“Our current definition includes investors that spend their days cruising around in a Ferrari that Daddy paid for,” SEC Commissioner Hester Peirce said. “Yet it excludes investors who spend their days earning money and their weekends and nights figuring out how to invest it.”

According to SEC, many people who don’t meet the financial qualifications for accredited investor status are nevertheless knowledgeable enough to participate in private markets; as such the regulator suggested the commission broaden the definition to include a test of an investor’s sophistication levels based on professional knowledge, experience or certifications.

Specifically, the new proposal would include individuals with entry-level stockbroker’s license or other credentials issued by an accredited institution, knowledgeable employees knowledgeable employees might be allowed the same access to their firms’ offerings as executives currently have, family offices with at least $5 million in assets under management as well as spousal equivalents who could merge their assets for the purpose of qualifying as accredited investors.

The proposal is open to commentary and the public can submit comments up to 60 days following the announcement. The agency is also looking for commentary on whether the financial thresholds should be lowered in areas where income levels may be lower and whether investors advised by professional brokers should also be considered accredited.

“Today’s proposals are an important step in our ongoing efforts to assess the private offering framework as a whole, including ways to increase opportunity for more of our Main Street investors to participate in the private capital markets,” said SEC Chairman Jay Clayton.

Telegram Delays Token Sale as the SEC Files for Injunction

Telegram is ready to push back their token sale following an injunction initiated by the US Securities and Exchange Commission over the sale of its Gram tokens.

The SEC ordered Telegram to stop the token sale with an emergency restraining order against Telegram Group, Inc., and TON Issuer, the two issuers of Telegram’s tokens listed in the Regulation D filing with the SEC in February and March 2018.

Telegram is ready to follow the SEC’s order for now and delay the token sale.

“Telegram has agreed to stipulate that it will not make any offers, sales, or deliveries of its expected cryptocurrency, called “Grams,” in order to maintain the status quo until this Court can resolve the legal issues at the heart of the matter,” the document reads.

Last Friday, the SEC filed the emergency action against Telegram to prevent it from distributing its Gram tokens, which the agency deems as unregistered securities. The regulator said Telegram failed to register a securities issuance and “committed to flood the U.S. capital markets with billions of Grams by October 31, 2019” — the deadline for TON’s launch.

In a letter to investors following the SEC filed order Telegram said that it has been working with the SEC over the past 18 months and has been surprised to see the lawsuit initiated by the agency. The company also accused the SEC of failing to advise Telegram on its blockchain project and token sale.

By voluntarily stopping the sale and distribution of Gram tokens, Telegram states that the injunction is no longer required, asking the court to deny the SEC‘s motion.

With all the issues around the token sale, it looks like Telegram‘s token launch definitely won’t stick to the schedule.

Following Telegram’s response on October 16, where the company argued that its native crypto is not a security and the preliminary injunction should be denied, the SEC has responded with a new filing in the U.S. District Court on October 17.

In the document, the agency insists that Telegram has actually violated the U.S. securities laws and that a preliminary injunction should be granted to prevent Telegram from further violation, mentioning that the company is likely to violate the law again.

Should the motion pass, this would be a massive blow to Telegram’s efforts who already raised over $1.7 billion in two pre-sale rounds, with major venture funds, including Lightspeed Ventures, Sequoia Capital and Benchmark as investors.

Thailand Has First SEC-Approved ICO Portal

SE Digital Co., Ltd. (SE Digital) – a subsidiary of a leading Thai financial services firm Seamico Securities Plc (ZMICO), has been officially granted approval by Securities and Exchange Commission (SEC) to operate in Thailand as an Initial Coin Offering (ICO) Portal.

Announced on October 11th by The Bangkok Post, the ICO Portal will mark the official beginning of the regulated digital capital market and contribute to the economic advancement of Thailand.  Accordingly, SE Digital plans to launch Thailand’s first investment token, with a target transaction size of 2-3 billion baht (around $65,800,000-$98,700,000).

As an ICO Portal, SE Digital provides a highly secure feature-rich digital platform for capital raising as well as diverse financing solutions. Due to its team of experienced professionals and robust technology platform, the company is able to offer customized comprehensive solutions for each client.

As this marks a new chapter in Thailand’s capital market history, SE Digital plans to offer a broad set of services for ICOs, including strategic advisory, primary issuance as well as support for secondary market access, from compliance to investor communications.

The company will vet prospective token issuers before they seek approval from the SEC and assist them in meeting requirements such as Know-Your-Customer (KYC), CDD, Anti-Money-Laundering and investor suitability. It will also conduct due diligence on the proposed tokens before allowing them to reach investors.

In addition to that, apart from retail investors in Thailand, institutional investors, ultra-high net worth individuals, venture capital, and private equity funds will also be able to invest in these digital tokens.

Stephen Ng, Chief Marketing Officer at SE Digital, has stated the SEC’s approval was made to open a new chapter in Thailand’s capital market history and pave the way to its digital economic transformation, as it becomes one of the first ASEAN nations to offer fully-compliant ICOs. He emphasized:

“SE Digital will be able to promote the tokenisation of traditional assets providing investors with access to previously illiquid and difficult to access assets such as commercial real estate and investment products with global exposure, while offering issuers with a new fundraising alternative that allows access to a wider pool of capital providers with cost savings accrued from the digitisation on the blockchain.” 

He further added that Thailand has already a strong foundation for digital transformation, seeing as the country has positioned itself as a regional financial hub, a growing and vibrant start-up community, and a progressive regulatory regime that promotes digital innovation.

Furthermore, as digital tokens is a new subject to most Thai investors, SE Digital announced that it plans to introduce a series of educational programs through cooperation with its local partners, regulators and leading organizations.

“As asset tokenisation fully takes hold, it will help bolster innovation and competitiveness of Thailand’s capital markets. This digital transformation will bring Thais, public sectors and private sectors forward by providing them with greater access to capital formation and new investment opportunities, enhancing transparency, and automating of costly compliance requirements,” concluded.

Meanwhile, Seamico Securities’ strategic investor – Elevated Returns, has seemingly applied to the Thai Securities and Exchange Commission (SEC) for a Digital Assets Exchange License with the goal to launch a new trading venue that would provide a secondary market for such tokens by 2020. and SEC Agree $24 Million Settlement Over EOS ICO

Blockchain company has reached a civil settlement agreement with the United States Securities and Exchange Commission (SEC) relating to an unregistered initial coin offering (ICO) it undertook in 2017-18.

The settlement relates specifically to the ERC-20 tokens that sold on the Ethereum blockchain between 26 June 2017 and 1 June 2018. The SEC said the unregistered ICO raised the equivalent of around 4 billion dollars.

In a statement, said it would pay a $24 million fine whilst neither admitting nor denying the SEC’s findings, this representing around 0.6% of the total amount raised through the ICO.

The main reason behind the SEC’s case filing was that Block.on did not provide ICO investors with the information necessary in a securities offering. While $24 million might seem like a lot, it is a minor inconvenience for which raised $4 billion.

On a further controversial note, even made investment purchases with higher amounts. Earlier this year, set out to build a decentralized social network, in the process buying the website Voice for $30 million.

With this settlement between the SEC and, the company is guaranteed that EOS won’t have to contend with regulators trying to classify it as a security offering. This also makes way for EOS to be traded on U.S.-based cryptocurrency exchanges without any additional repercussions.

Block.One’s statement said that its ERC-20 token is no longer in circulation and will not require the token to be registered as a security with the SEC.

“The SEC has simultaneously granted an important waiver so that will not be subject to certain ongoing restrictions that would usually apply with settlements of this type. believes the SEC’s granting of this waiver evidences’s continuing commitment to compliance and best practices in the United States and globally.”

This can become a cornerstone case, as blockchain and ICO projects can see that the path taken by might not be as cumbersome as registering and filing for a securities offering, like in the case of Blockstack.

Earlier this year, Blockstack became the first blockchain company that filed with the SEC under Regulation A+. During its token offering, the company managed to raise $23 million, while the costs of going the official route with the SEC was estimated around $2 million.

SEC Serves Cease and Desist Order to Russian ICO Rating Website

The United States Securities and Exchange Commission (SEC) has fined and settled charges against Russian analytics website ICO Rating in the amount of $268,998 for failure to disclose payments it received to publicize digital asset offerings of issuers it had rated, according to an announcement.

In the announcement, the US Securities and Exchange Commission disclosed that it had charged ICO Rating for violating anti-touting provisions for projects rated from December 2017 to July 2018.

Particularly, the regulator claimed that ICO Rating violated the anti-touting provisions of Section 17(b) of the Securities Act of 1933 by failing to disclose payments it received from initial coin offering (ICO) issuers it rated and published on its platform.

According to the press release, ICO Rating featured ratings of tokens that the regulator deemed to be securities on its website as well as across social media. Such as projects rated by ICO Rating during that time raised funds through particular initial coin offerings (ICOs), proper disclosures should have been made to potential investors.

Associate Director of the SEC’s Enforcement Division Mellisa Hodgman explained:

“The securities laws require promoters, including both people and entities, to disclose compensation they receive for touting investments so that potential investors are aware they are viewing a paid promotional item. […] This requirement applies regardless of whether the securities being touted are issued using traditional certificates or on the blockchain.”

Neither admitting nor denying the SEC’s findings, the Russian-based company has agreed to cease and desist from committing any future violations of these provisions. Consequently, it paid disgorgement and prejudgment interest of $106,998 and a civil penalty of $162,000, which rounds to a total of $268,998 in damages.

Meanwhile, August has proven to be a busy month for the regulatory agency. Just last week, the SEC charged New England-based SimplyVital Health for failing to register a $6.3 million Ether (ETH) pre-sale of its HLTH tokens. Without confirming or denying the allegations that it violated certain aspects of the Securities Act of 1933, the healthcare agency agreed to a cease-and-desist order imposed by the regulator.

Earlier in August, it has also been reported that the SEC reached a $7 million dollar settlement against two other ICO-based projects – PlexCorps and Reggie Middleton of Veritaseum – over an allegedly fraudulent ICO.