SEC Pulls Down More Than a Dozen Illegal ICOs in the Last Fiscal Year

05. Nov 2018 Posted by Akolkar B on News

In the last fiscal year ending September 30, the U.S. Securities and Exchange Commission (SEC) has pulled down more than a dozen token sales according to the agency’s annual enforcement report. Over the last year, the SEC has been having a strong vigilance over the functioning of the ICOs.

In fact, the SEC has long argued that tokens which are used in fundraising processes like the Initial Coin Offerings (ICOs) be categorized as securities. However, the SEC has yet to come with official rules regulating the ICO market or the crypto space.

In its annual report, the SEC notes that “Given the explosion of ICOs over the last year,” it has sought to pursue “cases that deliver broad messages and have market impact beyond their own four corners.” Furthermore, in 2018 alone, the SEC has “brought 20 standalone cases” involving digital assets and ICOs.

The agency also added: “In the past year, the Division has opened dozens of investigations involving ICOs and digital assets, many of which were ongoing at the close of FY 2018.”

A joint statement published by the SEC Division of Enforcement and the SEC Office of Compliance Inspections and Examinations urges investors to maintain a caution with respect to the celebrity promotion of the ICOs. The agency says that it has “brought an almost immediate end to such promotions.”

The SEC that many cases it found has involved the allegations of fraud. However, the Division of Enforcement has also taken several actions “to ensure compliance with the registration requirements of the federal securities laws.”

Last year in 2017, the SEC Division of Enforcement started its Cyber Unit which has been having a strict monitoring on cyber-related misconduct. As a result, "the SEC's enforcement efforts impacted a number of areas where the federal securities laws intersect with cyber issues," this year.

The report also notes that the "the Commission brought 20 standalone cases, including those cases involving ICOs and digital assets”. By the end of the fiscal year i.e. September 30, "the Division had more than 225 cyber-related investigations ongoing."