In the wake of the Securities and Exchange Commission’s (SEC) recent stance on "Initial Coin Offerings" or "Token Sales", leading digital asset exchange ShapeShift has announced that it is going to analyse the tokens currently supported on its platform.
Last month, the SEC released a new investigative report in which it said that ICOs or token sales, which involves offers and sales of digital assets by virtual organisations using blockchain or distributed ledger technology (DLT), may be subject to the requirements of the federal securities laws. ShapeShift said that it expects new definitions to emerge as society comes to understand the power and diversity of this emerging technology.
As such, the startup said that it needs to adapt its service offering to ensure it’s not mischaracterized as a “securities exchange.”
“[W]e may need to halt our inscriptions to certain blockchains. This means that we may need to delist some types of tokens from the platform, which is unfortunate for our users who have enjoyed the ability to participate in these experimental and innovative technologies,” ShapeShift said in an online post.
The exchange said that it will examine the tokens supported on its platform through the lens of “Howey Test”. The SEC applies the same test to determine the presence of a security. ShapeShift also said that it would consider the application of the Howey test to all new tokens it lists in the future.
“As that analysis is done, certain tokens may be removed from the service for individuals within the United States, who will then no longer be able to interact with these technologies safely or transparently through the ShapeShift platform,” it added.
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