Ethereum price: Tim Draper weighs in on SEC ICO decision

The US Securities and Exchange Commission’s recently-published comments that digital coin sold through ICOs are “subject to the requirements of the federal securities laws” has prompted a reaction from venture capitalist Tim Draper.

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In an open letter to the SEC via Facebook, Draper recommended that projects that have issued or will issue tokens before October 30 should be “grandfathered in” as non-security instruments. He also made several recommendations on how the agency could approach regulation of this nascent sector. In his Facebook post, Draper wrote:

“1. If the purpose of a token is for investment, it must register with the SEC.
2. If the purpose of a token is for societal transformation, and all proceeds go to the support and development of the token, it need not register.
3. If the purpose of a token is to raise money for a company, and the money is used to support the company, it must register with the SEC.”

The investor argued that this approach could make it clear that ICOs are not a way for existing companies to raise money from the public without registering with the SEC, while at the same time allowing bockchain-based innovations to “flourish in our country unfettered”.

Draper, who famously acquired nearly 30,000 bitcoins at an auction in 2014, has been among the earliest and most vocal supporters of bitcoin and blockchain innovation. He also invested in two blockchain-based projects – Bancor and Tezos – both of which had hugely successful initial coin offerings this year.

The ethereum price has remained relatively steady since the release of the SEC’s comments. In today’s trading the cryptocurrency was at $203.25, as of 12:45 BST. The coin’s 24-hour price was little changed, according to data from the GAX exchange.