I think you may be missing the point here. These statements do not effect every ICO.
Only ICOs that have management working to earn profit for DAO (DAO shares are ownership and shares of profit streams) investors are regulated under this language. ICN Iconomi, definitely falls under this type of management style, for example. These coins have a central management, and an expectation of profit due to the profit sharing mechanism of the DAO and DAO-like profit sharing coins. Thus they, in my opinion, and the opinion of the SEC are securities. The definition of security, is a note that gives you ownership, voting rights, and most importantly, “the expectation of profit.” Imo, 85% of coins don’t fall under that definition. I think the SEC may be intentionally vague here to make people think all ICOs can be regulated by them. That’s just not correct from a legal standpoint.
Some ICOs are nothing different than selling software access to consumers. Like selling memberships to Microsoft Office Online. Like I said, most ICOs and cryptocurrencies in general, do not have a “expectation of profit,” dividends, investment portfolios, or any other type of management structure working to gain profit for it’s share/stake holders. It’s for this reason, I believe from my knowledge of how Registration of securities works and my knowledge of Cryptocurrencies, that this rule does not apply to the vast amount of coins out there. If exchanges want to remain unregulated they should not be allowing these tokens (securities under sec) to be traded on their sites.
On the topic of Exchanges having to register. If the Exchanges allow for DAO-like tokens, to be traded on their platforms, imo they must comply and register. These registration laws were created to protect consumers from the sketchy stock companies pulling many of the same schemes as illegitimate ICOs. I think this is fair, but fucking sucks! Because more regulation means less fun. I experienced the Forex markets become regulated last decade, regulators basically made it impossible for the normal investor to make money anymore. I think we could see exchanges freeze any coin market that would fall under the SEC language. In order to stop themselves from being out of compliance with the SEC and FINRA. Many ICOs are not selling ownership stakes, and do not have voting rights, they are Utility coins (including ours) which are essentially little software licenses that give you access to a network like Factom or Trollbox One beta, for example. Owning a factom would give you the right to run their system, not own the company and/or expect profit from the management of factom. If the price of Factom goes up on an exchange, it’s because people want to pay that price to access the network. There’s no expectation Factom will make anyone a cent, but that does not mean it won’t be valuable. That’s how gold is… you can buy it but no one is guaranteeing it will go up. Same works with Non-DAO tokens. I do not think the SEC overstepped its charter by making this statement. Coins like ICN are treading on dangerous waters imo. I predicted DAO-like Coin/Token crypto structures would end up giving regulators the ammo they need to regulate us and the exchanges into oblivion. just some thoughts.