SEC Draws Battle Line Against ICO Scams in it’s Yearly Annual Report

SEC Draws Battle Line Against ICO Scams in it's Yearly Annual Report

The Annual Report on the Division of Law Enforcement by the Securities and Exchange Commission (SEC) has revealed its plans of placing strict rules against ICO scams. With a total amount of  $794 million investor funds returned this year alone, the SEC has made it clear that spearheading investigations to help reduce fraudulent ICOs to its barest minimum remains its major goal.

Highlighting the pace at which digital technology enhances cyber-related misconduct, precisely in the context of increasing ICO scams, the report listed the Insurance of Public Statement and the Trading suspension authority as the top tools used in protecting and educating investors and market participants.

Underneath a sub-heading titled “ICOs and Digital Assets”, the report terms ICOs as “high-risk investments”, as most issuers lack established track records, viable products, business models, or the capacity for safeguarding digital assets from theft by hackers.

While establishing the mission of the Enforcement Division as a watchdog against regulatory violations and the exploitation of Blockchain technology, it said ;

“We also have recommended enforcement actions for conduct ranging from registration violations, to unregistered broker-dealer activity, to instances in which the purported use of  blockchain-related technology is merely a veneer for outright fraud.”

Noting the rapid involvement of celebrities in the cryptocurrency space, the report remarked ;
“The Division has used public statements to send messages to the ICO and digital asset marketplace on issues such as the potentially unlawful promotion of ICOs by celebrities and risks associated with online trading platforms for digital assets” a statement directed towards the overthrowing of the Centra Initial Coin offering, which was endorsed by boxing champion Floyd Mayweather and American disc jockey popularly known as DJ Khaled as an example of the SEC’s impactful approach towards fintech startups.

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The SEC has also intensified its activities by suspending stock trading of publicly traded issuers to ensure the reliability and accuracy of assertion in ICO and other cryptocurrency related operations.

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