With increasing regulatory scrutiny, most in the U.S. have decided to exercise caution when it comes to initial coin offerings. The easy fix: Limiting token sales to so-called accredited investors, who meet net-worth and/or income qualifications. But an ICO that seeks mass participation is not necessarily well served by those limits as the tokens are in the hands of relatively few potential users once the sale is complete.
An intriguing plan from Civil, which has big plans for reinventing digital journalism, might have an end around that allows all investors to participate in its ICO. The theory is that the framework developed in "The Brooklyn Project" allows for tokens to be sold to all comers as they would not be purely securities in a legal sense. Buying the Civil tokens will not allow the investor to immediately sell those in the market until they demonstrate they are actual users of the coins. In theory, this makes the purchase of Civil tokens more like buying a traditional good rather than a pure financial instrument.
Whether the SEC ultimately agrees, this is an ICO worth watching closely. Civil is not the first group to try and prove their token has utility and therefore should be regulated under a different framework, if at all. But it is a high-profile effort, with the backing of ConsenSys ventures and a partnership with the Associated Press. We at The Block will talk with the folks at Civil as soon as possible, and bring you more once we do. (Source: CoinDesk)