Not only ICOs: The SEC Targets Crypto Airdrops
The clashes between the Securities Exchange Commission (SEC) and cryptocurrency startups are becoming increasingly murkier by the day. In its latest showdown, the SEC banned Tomahawk ICO regarding its bounty program, fining it $30,000 for “fraudulent” marketing strategies after it re-jigged its ICO to a non-OTC offer, thus exempting it from further regulation by the SEC. In a recently issued statement, the SEC explained: “Tomahawk’s issuance of tokens under the Bounty Program constituted an offer and sale of securities because the Company provided TOM to investors in exchange for services designed to advance Tomahawk’s economic interests and foster a trading market for its securities. Tomahawk and Laurance violated Sections 5(a) and 5(c) of the Securities Act by offering and selling TOM without having a registration statement filed or in effect with the Commission or qualifying for an exemption from registration with the Commission.”
The problem with airdrops
In essence, the problem the SEC is attempting to resolve goes beyond the new age fin-technology platforms of cryptocurrency and blockchain tokens.
At this point, a closer look at cryptocurrency airdrops is required. A crypto airdrop is defined as a ‘free’ distribution of a coin/token by a project to its interested investors, often called a community. The type of airdrop will differ from one project to another. In most airdrops, users will only receive an airdrop bounty if they possess a specific type of token.
Another method to receive airdrops is by committing to perform particular social tasks and win tokens. A straightforward way is to get the token by a registered email address.
Are crypto airdrops safe?
The best practice for secure crypto airdrops is to create a new email specifically for airdrops. The crypto general rule of thumb is to ensure that all private keys are never shared with anyone, and are well secured. To read more about airdrops and security, head to our crypto airdrops section.
90% of the airdrops are ERC-20 tokens
Some interesting airdrops statistics from Airdropsmob reveal that 917 airdrops have been listed on the platform since March 2018. The nominal value or the value claimed by these projects with respect to their ICO price was around $8000. However, it was found that many of them failed to have a value set. From the above, as many as 824 (90%) were built on Ethereum as an ERC-20 token based, 24 on their own chain, 17 on Stellar, and 12 were built on NEO.
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