https://i.postimg.cc/jqP5SWLz/hole.png

# How bad is all this really?

Continuing from my post the other day, I wanted to dig a little deeper into one of the topics making things potentially very bad out there for investors currently.

By the way, the post in reference can be found here:

https://steemit.com/crypto/@jrcornel/crypto-how-bad-is-this-really

The topic that is causing the most fear in my eyes currently is the threat coming from regulators.

# What's going on:

Basically there is a lot of fear out there that the SEC may be going back in time and looking at each and every major ICO project and deciding whether they violated securities laws or not.

If they did, the SEC has laid out a blueprint of what they will do.

That blueprint consists of the project having to pay back the dollar amount raised in the ICO to investors, no matter that the ICO likely raised money via bitcoin and ether.

Which means these projects will have to sell their bitcoin and ether holdings to raise cash to satisfy the SEC.

The SEC is only going after the scam projects right?

Maybe, or maybe not.

It sounds like the SEC may be going after any and all projects that did not comply with securities laws when they conducted their ICO.

# Why does that matter?

As far as I know, not many projects registered with the SEC, in fact I haven't heard of a single on that did.

And, there was a ton of money raised via ICOs in the last couple years!

In 2017, roughly $7 billion was raised via ICO.

In the first half of 2018, another $14 billion was raised.

https://i.postimg.cc/MHP1TvG2/5b3a22bd07df1186008b4601-640-480.png

(Source: https://www.businessinsider.com/global-ico-activity-spikes-2018-7)

That means that over the past 2 years, we have over $21 billion raised via the ICO!

That could represent a ton of selling pressure if even a small portion of that has to be returned for violating securities laws.

If a big portion of that must be returned, than well, even the current prices are not going to hold.

Then you also have to factor in what may or may not happen to exchanges that were trading these coins that were technically unregistered securities.

How heavy handed will the SEC come down on them?

# Regulators are in the driver seat right now:

Sadly, it sounds like a lot is hinging on how the SEC decides to go after these ICO projects and also the exchanges that have been trading "unregistered securities". 

Hopefully for all our sakes they mostly try to focus on the outright scams and don't bring down a big chunk of the entire industry.

Time will tell.

Stay informed my friends.

Image Source:

https://www.vmburns.com/?p=2548

Follow me: @jrcornel