The u. s. Securities and Exchange Commission’s (SEC) advisor for Digital Assets and Innovation Valerie Szczepanikststed that platforms seeking to list initial exchange offering (IEO) tokens for a fee might notice themselves in regulative hassle. Szczepanik delivered her comments at the consensus 2019 conference on May 13.

Speaking on IEO, Szczepanik — also referred to as the commission’s “crypto czar” — argued that platforms seeking to list IEO tokens for a fee and attract consumers for an issuer are probably participating in broker-dealer activity. Szczepanik said:

“If they're not registered they'll notice themselves in hassle within the U.S., if they need a U.S. issuer or U.S. buyers, if they're operative on the U.S. market.”

Szczepanik any mentioned the case of TokenLot last September, — a cryptocurrency dealer lead by Lenny Kugel and Eli L. Lewitt that marketed itself an “ICO [initial coin offering] superstore” — and stated that “it was instructive during this regard.” She stated:

“This was a platform that was helping to bring consumers to ICOs [...] in that case, there was an enforcement action charging the platform with acting as a unregistered dealer and collaborating within the distribution in violation of the registration provisions.”

At the time, the SEC’s alleged that Kugel and Lewitt broke the law by failing to register their business within the country. TokenLot agreed to pay a $471,000 fine however failed to admit or deny the findings.

In early Apr, the SEC revealed a framework, developed by Szczepanik and another Commissioner Bill Hinman, to assist market participants to ascertain whether or not a digital asset is deemed to be an investment contract, and so security. The framework is meant to function AN analytical tool that may facilitate operators of ICO and token issuers verify whether or not their offering is probably going to fall subject to federal securities laws.

Szczepanik has antecedently indicated that assets within the rapidly-growing stablecoin sector might experience problems under existing securities laws.

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