Investor Tim Draper Calls on SEC to 'Grandfather' ICOs Into Compliance
Investor Tim Draper penned an open letter to the SEC today asking for the agency to carve-out exemptions for certain ICOs.
Investor Tim Draper is calling for the US Securities and Exchange Commission (SEC) to exempt certain initial coin offering (ICO) projects from the repercussions of its ruling that tokens can be captured under its definition for securities.
In a Facebook post today, Draper thanked the SEC for its guidance, but sought to call on the agency to make exemptions for projects that have issued or will issue tokens before October 30, arguing this would be "in the spirit of clarity and encouraging innovation."
Famed for purchasing nearly 30,000 bitcoins at auction in 2014, Draper has been among the earliest and most vocal supporters of bitcoin and blockchain innovation. As such, it was perhaps not surprising when Draper invested was again one of a few early investors in decentralized projects seeking funding by use of the method.
In the post, Draper goes on to recommend a series of factors the SEC should consider so as to send the right message to innovators he fears may otherwise relocate to other jurisdictions.
"1. If the purpose of a token is for investment, it must register with the SEC.
2. If the purpose of a token is for societal transformation, and all proceeds go to the support and development of the token, it need not register.
3. If the purpose of a token is to raise money for a company, and the money is used to support the company, it must register with the SEC."
Draper's investments in the nascent sector have so far included a self-governing blockchain project (Tezos), a liquidity mechanism for smart contracts (Bancor) and a decentralized tool for fighting email spam (Credo).
Image via Dan Cawrey for CoinDesk
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