Under the SEC ICO probe SEC issued subpoenas to a number of companies and people that are involved in ICOs and demanding for information as part of its effort to control the fraudulent activities. The focus is on those that are suspected of breaking the law and seeking funds for scamming.
Issuing Subpoenas to crackdown Fraudulent ICOs
The U.S. Securities and Exchange Commission (SEC) has sent subpoenas to a number of organizations and individuals that have been behind the Initial Coin Offerings (ICO) as a part of its crackdown on fraudulent ICOs.
For the last few months, there have been a lot of buzz going around the oncoming regulations. But with this step, a clear sign has been given by the agency that it is on board to rein in the popular fundraising method that has a multi-billion dollar market.
In comparison to last year’s $6 billion (approximately), ICOs have already raised more than $1.65 billion this year. It is only natural that with this kind of investment the regulatory bodies are going to be involved in it.
Last week in an SEC conference, the former SEC commissioner Dan Gallagher who is now a part of a blockchain company’s board, said:
“We’re seeing the tip of the iceberg … there is going to be a ton of enforcement activity.”
To curb fraud initial coin offering SEC will scrutinize associated parties
According to the sources, as per the subpoenas, over the last few months, to curb fraud schemes of initial coin offering SEC has asked for the information from the companies, that are raising funds through virtual currencies along with the attorneys and advisory firms that have been involved in the process. This demand for information from the commission began last year and has been continued in the recent months.
Up until now, the crypto market has been outside the US framework for regulation. As it has been reported by a study that about 250 to 300 million dollars have been raised in ICO by the fraudulent companies. Without having the concrete knowledge of this market, the field was left wide open that the criminals took advantage of.
Last week only, Robert Cohen, head of the cyber-enforcement unit of SEC said, since the agency has started asking questions, about a dozen of companies have already delayed their ICOs.
Jay Clayton SEC chairman to ICO’s- “Get registered or face sanctions”
Jay Clayton, SEC Chairman has repeatedly said that majority of ICOs should be registered who also pledged to sanction more firms in his January interview if people don’t change their ways. The Enforcement Division of SEC is coordinating the subpoenas that were created last year.
According to the industry experts, the focus of SEC scrutiny right now is on SAFTs or simple agreement on future tokens. The commission sees them as tokens that are traded as securities but doesn’t conform to the existing rules.
What are your views on SEC ICO probe, sending subpoenas to the companies behind the ICOs? What do you think will be its effect on the crypto market? Let us know below!
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I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.