As the U.S. Securities and Exchange Commission (SEC) starts to take a hardline approach to cryptocurrencies and initial coin offerings (ICO), many companies are taking a different stance than previously seen with regards to their ICOs. Instead of a wide-open offering, they now are filing the ICO with the SEC, and some are even barring U.S. investors from taking part, according to a Reuters report. The moves come as legal advisors tell their clients to be extremely cautious, and warn that the securities regulator could come down on them for breaching rules.

The SEC has said that cryptocurrencies should be regulated, and that digital coins amount to the same as securities. The UK-based Celsius Network, Scotland’s CaskCoin and British Virgin Islands-headquartered Auctus are just a few of the companies that have prohibited U.S. investors from participating in their operations to not fall under the SEC hammer. Anyone wishing to invest in the companies will have to verify their identity with a passport, and U.S. Internet Protocol (IP) addresses will be blocked completely.

Hundreds of billions of dollars have been raised through ICOs, with very little protection given to investors. In an effort to appease regulators, many in the U.S. are now filing with the SEC to avoid being targeted by the agency. The Causam eXchange out of North Carolina is an energy settlement platform that is currently running its token sale. It listed the offering under the Reg D section of the SEC rules, which allows a company to sell securities products to accredited investors, according to the news outlet. Other companies are opting for listing their ICOs under the SEC’s crowdfunding rules, which allow for an organization to seek capital up to $50 million.

Once word starting getting around that the SEC might be looking at regulating the industry, there was almost an immediate drop in money raised through ICOs. In January and February of this year, $726 million in investment funds were received by ICOs, down 43% over the amount collected in November and December of 2017. Companies such as Stream, a startup out of Silicon Valley, have scrapped their ICO plans completely due to the possible SEC intervention into the market.

There’s almost no doubt that the SEC will get involved and provide oversight of ICOs, if not the entire cryptocurrency industry. It uses as its basis for regulation a 1946 Supreme Court case that centered on securities and the requirement to follow the “Howey Test.” In the court’s ruling, it defined a security as “an investment of money in a common enterprise, in which the investor expects profits primarily from other’s efforts.” Perhaps all ICOs should only allow investments through forms of cryptocurrency, since money is defined as legal tender, and cryptocurrency is defined as not legal tender.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.