The agencies clarified their strategies in a joint statement issued today:
"When market participants engage in fraud under the guise of offering digital instruments – whether characterized as virtual currencies, coins, tokens, or the like – the SEC and the CFTC will look beyond form, examine the substance of the activity and prosecute violations of the federal securities and commodities laws. The Divisions of Enforcement for the SEC and CFTC will continue to address violations and bring actions to stop and prevent fraud in the offer and sale of digital instruments."
We are glad both agencies will continue to target frauds and scams masquerading as initial coin offerings. As we’ve explained in our Framework for Securities Regulation of Cryptocurrencies, questionably marketed or designed cryptocurrencies may indeed be running afoul of securities law. This joint statement is important because the CFTC is the regulator with jurisdiction over digital commodities like Bitcoins and some other virtual currencies and the SEC is the regulator with jurisdiction over tokens that are securities. They'll need to continue to work together to draw distinctions between those fields of our technology, and are off to an excellent start.