Initial coin offerings (ICOs) have been under scrutiny of the U.S. Securities and Exchange Commission (SEC) for some time now, with even a special Cyber Unit being created to give guidance about cybersecurity. SEC’s position on ICOs can only be described as distrustful. The U.S. watchdog advises against investing in ICOs as there is no guarantee that the ICO in question is not a scam.
The SEC annual end of fiscal year enforcement report has been made public, and the commission’s eye on cyber activity and malpractice has increased since last year, as it is stated in the report:
“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.”
The interest and mistrust that can be seen in the watchdog come at a time when overall interest to the blockchain sector is steadily increasing. This is one of the reasons why ICOs have become so popular lately. Another reason must be that there have been enough successful pioneers that have shown what one might accomplish with the help of an ICO. Yet, we must not forget that there is a certain risk of losing one’s money when investing in an ICO, which must be said, is another reason why ICOs are so popular. Ill-wishers may start an initial coin offering with only the intent to help investors part with their cash.
The commission reports that a couple of unlawful ICOs were mentioned in the report. Three such ICOs deceived investors out of 68 million dollars.
The Australian computer scientist and businessman Craig Steven Wright, who has claimed to be the person behind the unknown Satoshi Nakamoto, believes that the watchdog is wrong in its fight against ICOs.
...online token securities scams.
— Dr Craig S Wright (@ProfFaustus) October 24, 2018
Yes, these where tokens. They were traded just like ICOs.
The SEC shut them down
Blockchain is a means to track these scams. In the 90s, many got away as they destroyed evidence
With a blockchain, these ICO frauds are able to be prosecuted...
Of course, blockchain technology allows us to establish the fact that the ill-wishers have no intent in using the money for the declared project, but that doesn’t really help the people who are already conned out of their money.
The intention of SEC is clear, make the sector safer by implementing harsher regulations, however, there is a chance that these new regulatory divisions will put many prosperous projects at risk without solving the problem of rogue ICOs.
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