Andreessen Horowitz’s digital assets-focused division’s general counsel, Miles Jennings, advises startup founders to avoid the US market when conducting token sales due to the Securities and Exchange Commission’s (SEC) strict regulations.
Jennings points out that the SEC requires almost every token to be registered under US securities laws, and failure to do so can result in severe fines. In order to avoid the SEC’s jurisdiction, Jennings suggests conducting public and private sales of crypto assets outside of the United States.
However, this highlights the tension between the vision of blockchain developers to create a decentralized system and the regulatory framework enforced by the SEC.
Jennings warns that many ICOs may fall under the criteria of the Howey test, making them subject to SEC regulations.
