Here is the SEC Order that Halted Munchee ICO

ICO News US SEC Places Ball in Investors Court

The Cryptocurrency market will track how regulators respond to ICO's, SEC Chairman Jay Clayton said that resemble new company initial public offerings that should have all details transparent.

"A number of concerns have been raised regarding the cryptocurrency and ICO markets, including that, as they are now operating, there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation", says Jay Clayton in a statement published on Monday.

His statements were not entirely negative.

"The technology on which cryptocurrencies and initial coin offerings are based may prove to be disruptive, transformative and efficiency enhancing", he said.

"By and large, the structures of initial coin offerings that I have seen promoted involve the offer and sale of securities and directly implicate the securities registration requirements and other investor-protection provisions of our federal securities laws", he said.

Although Clayton doesn't outright condemn ICOs, he raises concerns about the dubious nature in which some projects manage their funding, all the while recognizing that he believes that ICOs "can be effective ways for entrepreneurs and others to raise funding, including for innovative projects".

He also advises investors to read the SEC's many alerts, bulletins and statements on ICOs and cryptocurrency-related investments.

Clayton noted that this lack of regulation, in addition to cryptocurrencies' ease of transfer between countries where the SEC lacks jurisdiction, means the agency "may not be able to effectively pursue bad actors or recover funds".

Munchee, based in San Francisco, was trying to raise $15 million to improve its app, but the SEC said that would have been similar to issuing securities without properly registering with regulators.

Munchee Inc. launched its ICO in October, promising to build a new platform "that looks to disrupt sites like Yelp and Google Places by introducing an immutable blockchain ledger for food reviews".

The SEC issued a paper in July, in which it warned that certain tokens issued in ICOs could be classified as securities depending on certain conditions, including a "reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others".

Unlike the PlexCoin incident - in which the organizers went on a Bonny-and-Clyde-style escapade to evade authorities - Munchee's investors got a refund of all the MUN tokens they bought and the organizers cooperated with the SEC's investigation, helping them avoid a penalty. Tokens and offerings that incorporate features and marketing efforts that emphasize the potential for profits based on the entrepreneurial or managerial efforts of others continue to contain the hallmarks of a security under USA law. Munchee Inc. returned proceeds to investors and halted the delivery of tokens.

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