The past months have tested the commitment of even the most ardent blockchain enthusiasts. Around a year ago, the new technology enjoyed a peak in public attention and, consequently, market value. Today, the hype has receded as every offering on the market has declined at least 70% from its all-time high.
It’s not the first time a boom and bust cycle has hit the space. Bitcoin, in particular, has gone through several speculation bubbles since it was launched in 2009. Its resilience is often cited by many as a reason to invest. This time, however, it may not be just the usual suspects affecting the space. Regulations on Initial Coin Offerings (ICOs) are new challenges for the blockchain community’s development and have caused many to shy away.
A controversial ruling by the United States Securities Exchange Commission (SEC) deemed token sales and ICOs as sales of securities. This means that many of the virtual assets that investors had purchased as utility tokens don’t pass the Howey Test and should be registered investments. A change of affairs that has great implications for the blockchain market’s largest ICO platform and second largest contender, Ethereum.
Although the decision doesn’t affect Ethereum directly, it pushed many of its holders to take a step back. The platform’s ERC20 utility tokens are generally designed to be a type ...
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