In June 2018, SEC director William Hinman stated "putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions (as with Bitcoin)".
According to the report, Hinman‘s exclusion of ether’s ICO likely means that he believes that it was a securities offering. Should the SEC agree with him, the list of ERC20 ICOs and tokens built upon its blockchain would not only have had unregistered securities offerings in the past, but are also currently classified as securities as many of them have likely not cleared the bar of becoming decentralized.
As a result, these token projects would be both at risk of enforcement against the issuer and a sharp drop in liquidity due to action towards exchanges without securities trading licenses and the subsequent delistings.
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