SEC signals securities trading laws may apply to digital coin offerings

Sec Building

The U.S. Securities and Exchange Commission hinted Tuesday that the country's securities laws may apply to the sale of new digital coins.

The U.S. Securities and Exchange Commission signaled Tuesday that the country's securities laws may apply to the sale of new digital coins.

"The SEC's Report of Investigation found that tokens offered and sold by a 'virtual' organization known as 'The DAO' were securities and therefore subject to the federal securities laws," according to a release.

The DAO's token sale in June 2016 was hacked, leading to the infamous DAO hack on ethereum.

"We seek to foster innovative and beneficial ways to raise capital, while ensuring – first and foremost – that investors and our markets are protected," SEC Chairman Jay Clayton said in a statement.

CNBC previously reported that U.S. residents are often not allowed to participate in digital coin sales, or initial coin offerings, out of concerns the SEC would come after the firms if there were any problems with the fundraiser.

The SEC also issued an investor bulletin on initial coin offerings Tuesday.

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