The SEC and ICOs: Connections Between Digital Assets and Citrus Groves

38 Pages Posted: 5 Jun 2019

See all articles by Sam Waxenbaum

Sam Waxenbaum

Boston University, School of Law, Students

Date Written: May 8, 2019


In recent years, the growth of cryptocurrencies and products associated with them have grown from a fringe fad to an international phenomenon that has captured the imagination of millions. Cryptocurrencies and the blockchain platforms associated with them have given companies the ability to raise large amounts of money through the use of Initial Coin Offerings (“ICOs”) and the Tokens that they produce. The rampant growth of ICOs and the money they bring with them have, predictably, attracted the attention of hackers, fraudsters, and several other bad-faith actors who are just as excited to cash in on the latest trends in digital asset financing. While billions of dollars have been raised by ICOs, these offerings have not provided investors with the kind of protection one would expect to find in financial markets: until now. ICOs have recently come under heavy scrutiny by the United States Securities and Exchange Commission (“SEC” or “Commission”) in the wake of several stories of public investors who were taken advantage of by fraudulent Token offerings. First, this note will provide a basic understanding of the technology behind ICO Tokens and will lay out a brief history of their growth. Second, it will examine the SEC’s investigation into Tokens offered by the Decentralized Autonomous Organization as well as two cases it has filed to halt the ICOs of AriseBank and PlexCorps. Third, this note will evaluate the arguments and counter-arguments concerning the classification of ICO Tokens as securities subject to federal securities laws. Finally, this note will examine the potential consequences for private companies wishing to raise capital through ICOs, their lawyers who may have their legal advice come under scrutiny, and ICO Tokens in general if this form of cryptocurrency is recognized to be a security.

Keywords: security, securities, crytocurrency, SEC, Securities and Exchange Commission, Satoshi Nakamoto

Suggested Citation

Waxenbaum, Sam, The SEC and ICOs: Connections Between Digital Assets and Citrus Groves (May 8, 2019). Available at SSRN: or

Sam Waxenbaum (Contact Author)

Boston University, School of Law, Students ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

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