Chris Concannon, President and COO of CBOE and CEO of BATS Global Markets, believes that the initial coin offering (ICO) market is in for a “reckoning.”
In an interview with Business Insider, Concannon, who is known to be a big advocate for cryptocurrency, thinks that investors should be losing sleep over fears of repercussions surrounding ICOs deemed illegal by the United States Securities and Exchange Commission. The CBOE President sees the “reckoning” coming in “two waves.”
First, he anticipates the SEC targets ICO participants, then he expects class-action lawsuits to be directed at the team members behind ICO projects.
Concannon explained "the actual party that offered the unregistered coin, they could have been involved in issuing an unregistered security,” continuing, "anyone who sold that off could be deemed an unregistered underwriter.”
Investors who purchased cryptocurrencies via an ICO are at risk for further liability. Concannon added: "If you sold someone an unregistered security you are liable to them if they decide to take them to court.”
Concannon’s remarks come after the SEC’s Jay Clayton reaffirmed its stance on the popular crowdfunding method. The SEC has repeatedly denounced ICOs for being unregistered securities, going as far as creating mock websites to teach "would be" investors about the potential dangers of investing in ICOs.
Over $5 billion has been raised by ICO crowdfunding in 2018, putting a spotlight on just how large a task the SEC has in front of it if it wants to tackle the ICO market in the way that Concannon suggests.
In related news, SEC Chairman Jay Clayton re-confirmed that Bitcoin isn’t a security, but was ambiguous in his comments about other cryptocurrencies. Later, SEC Director of Corporate Finance William Hinman clarified that Ethereum wasn’t classified as a security either, because it is not controlled by a central authority and does not contribute to funding business operations.