The crypto industry is in a panic mode and there are doubts as to whether it will be possible to sell any crypto tokens in the US in future. According to Simar Mangat, the founder of distributed video streaming venture Stream, the ensuing environment of regulatory uncertainty and the increasing rumors of subpoenas are causing anxiety in the industry and many project developers are thinking of moving elsewhere.
While no action has been taken against Stream, the threats by the regulators for tougher actions in the industry have led to unexpected overhaul of the startup’s product roll-out. In an announcement on Tuesday, Stream said it is releasing a White Paper which outlines how its token will be distributed, but has put the process on hold until the developers are aware of how the regulators will go about permitting its tokens – or otherwise.
Stream was launched in October last year and had plans to allow live-streamers, vloggers and online video-makers a way to break platform lock-in through creating a chrome extension, which will allow fans to tip creators whenever a video appears. However, the startup’s founder says that the entire project is in jeopardy at the moment.
If there were a path of how to do things right, that would be so much better,
Now, Stream’s counsel is wondering if any tokens at all can be distributed in the US without the full Know-Your-Customer (KYC) and anti-money laundering (AML) registration of anybody that purchases or holds them, or if stream tokens must now be registered as securities.
The company, through the founder, Mangat, feels that SEC is creating lots of walls in the way of their realization of the project. Mangat is of the opinion that uncertainties have dragged on further than he originally thought they would. CoinDesk reports the original plan was to launch the Chrome extension, release a round of investor tokens on the vesting schedule and airdrop tokens to the supporters on one day later this month. Mangat explained to CoinDesk:
It is basically delayed indefinitely with our legal team to make sure we can move forward in the most compliant way possible,
The bone of contention is whether or not all tokens are classified as securities or not. If they are, then airdrop tokens could be dangerous and could attract subpoenas in the future. Mangat was quick to point out that during the dot-com bubble era, some companies gave away equity which irked the SEC and other regulators, and tough actions were taken against the companies.
We don’t want to find ourselves in the same predicament like those companies,
It is due to this uncertainty that Stream is in the process of finding out whether its tokens should be registered as securities or if there is leeway to offer free tokens under the current SEC rules.
Do you think the legal uncertainties surrounding the distribution and holding of tokens are crippling the crypto and blockchain industry? Leave us your thoughts in the comments section.