Notebookcheck

Securities and Exchange Commission to crack down on shady cryptocurrency ICOs

The SEC wants to probe into ICOs that may be violating trading rules. (Source: CoinStocks)
The SEC wants to probe into ICOs that may be violating trading rules. (Source: CoinStocks)
It appears the US Securities and Exchange Commission (SEC) has issued dozens of subpoenas to cryptocurrency companies in regard to the number of token sales and Initial Coin Offerings (ICOs) that have been made recently. The SEC is looking for these cryptocurrency issuers to provide more information about their business practices and to dig out fraudulent activity.

Working For Notebookcheck

Are you a techie who knows how to write? Then join our Team!

Currently wanted: 
News Editor - Details here

The cryptocurrency market is famous for its current freedom from centralized regulation. However, this has led to a number of unscrupulous business models – for example, in the case of BitConnect which offered its own virtual currency to customers who could convince others to sign up to the platform (akin to a Ponzi scheme). ICOs in 2017 raised over US$6 billion and that figure is likely to be eclipsed in 2018. The Wall Street Journal has reported that the SEC has now stepped in and issued subpoenas to a large number of technology firms with the hope of weeding out some of the gunslingers that occupy the cryptocurrency Wild West.

There is some concern that there could be rule violation and illegal trading going on within cryptocurrency presales and ICOs. SEC Chairman Jay Clayton had this to say on the matter in an open letter published in December 2017:

Selling securities generally requires a license, and experience shows that excessive touting in thinly traded and volatile markets can be an indicator of 'scalping,' 'pump and dump' and other manipulations and frauds. Similarly, I also caution those who operate systems and platforms that effect or facilitate transactions in these products that they may be operating unregistered exchanges or broker-dealers that are in violation of the Securities Exchange Act of 1934.

Like it or not, some amount of cryptocurrency regulation in the near future seems to be inevitable at this point.        

Source(s)

static version load dynamic
Loading Comments
Comment on this article
Please share our article, every link counts!
> Notebook / Laptop Reviews and News > News > News Archive > Newsarchive 2018 03 > Securities and Exchange Commission to crack down on shady cryptocurrency ICOs
Daniel R Deakin, 2018-03- 1 (Update: 2018-03- 1)