The Securities and Exchange Commission, as part of its wider probe of cryptocurrency and the complex world of ICOs, is taking a sharper-eyed look at Overstock.com Inc’s sale of cryptocurrency to investors.
The announcement of the SEC’s interest dropped Overstock’s share some ten percent in stock market trading. Overstock has confirmed its intention to comply with federal regulatory authorities. Overstock further indicated that at the conclusion of its ICO, it had managed to net $100 million — and that it had further initiated a subsequent fundraising round.
Overstock announced its ICO in October of last year and said at the time that the offering would be legally compliant with SEC rules using an instrument called the Simple Agreement for Future Tokens. Overstock also noted that the investigation alone was no evidence of the SEC having already determined guilt or that it has “a negative opinion of any person, entity, or security,” reported Reuters.
SEC Chairman Jay Clayton, appearing before the Senate Banking Committee last month, noted a possible intention to request Congress pass legislation to improve oversight of virtual currencies such as bitcoin amid concerns about the risks posed by the emerging asset class. Since then, some ICO enthusiasm has died down — in part because bitcoin has lost approximately half its value after hitting a mid-December all time high around $20K.
“I hope it will scare scammers and fraudsters,” George Giaglis, a professor at the University of Nicosia in Cyprus and an adviser to ICOs outside the United States, said of the SEC investigation.
Giaglis went on to note his opinion that SEC-determined compliance would make ICOs more expensive.
“But investors will feel more secure. So hopefully this would create a more mature market,” he said.
ICOs raised about $5.5 billion in 2017, up from just $200 million in 2016.