SEC Charges ICO Rating Website for Misleading Promotions of Crypto

Published August 21, 2019 | Updated August 21, 2019

Update - SEC Postpones VanEck Bitcoin ETF But Bitcoin Price Responds Positively

SEC Charges ICO Rating Website for Misleading Promotions of Crypto

ICO Rating Website – has been charged by the SEC for failing to disclose the revenue from “paid for ICO reviews“. Recently, the SEC has begun an aggressive crackdown on ICOs which raised huge amounts of money during the 2017-2018 bull run. These fines could extend to other websites and exchanges which charged the ICOs for reviews and top listing.

The SEC pursued a cease and desist order against the Russian owners of the website. According to the filings, the SEC finds the website in violation of the ‘anti-touting’ policy which the SEC had earlier issued a warning for. The website owners (Respondents in the case) have been accused of not disclosing the payment received for promoting ICOs which, many of which are financial securities.

The law not only seeks to punish the seller or creators but also portals that were involved in the promotion of the sale. According to the SEC, the paid promotions require proper disclosure for the investors.

In anticipation of the move by the authority, the firm offered a monetary settlement to the Authority; which it accepted. The total fine charged by the SEC is $268,998.

ICO Rating

A Domino Effect on ICOs?

The court filing by the SEC noted,

ICO Rating’s research reports, ratings, and social-media postings publicized offerings of blockchain-based digital assets, including “tokens” or “coins” that were investment contracts, which are securities pursuant to Section 2(a)(1) of the Securities Act

The above-mentioned violation puts a lot of ICO projects at a huge risk. There were more than 1700 of similar ‘investment contracts’ offered during the 2017-2018 crypto-frenzy.

Moreover, even if they do not close down the project altogether, fines, reimbursement, and legal cost could easily shut down the projects built on these cryptocurrencies. A similar instance of this was witnessed with the Horizon State project in Australia which led to the demise of Decision Token (HST).


Nevertheless, some ICOs are fighting back with rigour. The Kik ICO case was the first one to challenge SECs claims. Recently, they accused the SEC of twisting facts and the jury is still out on it.

More recently, SEC froze the assets of Veritaseum, which cause a massive drop in the price of VERI. However, the Reginald Middleton and the team are fighting back as well. They claim that these were not securities and ‘utility tokens’ which the company had no control over.

Hence, while the SEC has been successful in its crack-down of the ICOs, there are still some areas where lack of regulatory guidelines are giving the ICOs a chance to fight back.

Do you think that these crackdowns would shrink the cryptocurrency markets or the ICOs would win on decentralization claims? Please share your views with us.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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Nivesh Rustgi 1181 Articles
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)
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