Ripple CEO and former SEC Commissioner: Ico are titles and must be regulated in this way

Recently, Brad Garlinghouse appeared in a podcast with Joseph Grundfest, a former commissioner of the Securities and Exchanges Commission of the United States [SEC]. Among other things, they talked about the Initial Coin Offerings [ICOs] and declared them as titles.

Most ICOs offer tokens to investors in exchange for accepting funds in Ethereum [ETH] and Bitcoin [BTC]. While this leads to the definition of token in securities, the price of the token and the success of the investment depends on the efforts made by those who have accepted the funds.

The unregulated nature of the ICO markets has also led to a lot of scams and frauds coming into the forefront. Observing this, Grundfest stated:

"If these instruments are actually securities, then they must comply with all the regulations of the US Securities and Exchange Commission and those are not trivial."

He went further to talk about the process of registering a token as security, seeking exemptions from certain requirements, and other factors such as restricting sales on secondary markets. He claimed to have added friction to the process, and this is "the last thing" that someone would want for fast and cheap transactions.

Ripple has also faced a number of causes in recent times about XRP, where investors have started suing the company on unmarked securities sales charges. This was also addressed by Grundfest, where he stated:

"You have people who bought some of these tools and lost money by bringing their counterparts to court and claiming that what you sold me was a security. hai is a group of dissatisfied buyers who claim that their encryption was security should have been registered and it was not. "

Garlinghouse provided statistics on the sale of ICO in 2017, claiming that it exceeded $ 3 billion , while in 2018 it increased to $ 10 billion. He also said:

"I would have guessed it would slow down in 2018 when regulators like the SEC intruded and more proactively called frauds and scams, and in many cases, I think they are titles and should be regulated in this way this year. "

He also stated that he does not see the ICO boom slow down" anytime soon ", as regulators do not show aggressive behavior regarding them. He stated that they should, as "a bit chaotic market". Grundfast also agreed with Garlinghouse, stating that ICOs are the "most open and notorious violation of securities laws by the Code of Hammurabi".

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