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Regulations
Steven Peikin, co-director of the US Securities and Exchange Commission (SEC) application division, recently described international co-operation as a key role in facilitating investigations into the initial currency sector (ICO).
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& # 39; Discouraging task & # 39; to identify misconduct
Speaking at the Harvard Law School, Peikin defined the SEC security division as having "the daunting task of pursuing unfair conduct and, where appropriate, recommending civil enforcement actions seeking in various ways injunctions or orders to cease-and- desist, sanctions, hangovers of ill-treatment gains, suspensions and bars of bad actors, and temporary suspension or withdrawal of securities ".
Peikin said that collaboration with international regulators is "critical" to the SEC's ability to investigate and take action against ICOs. ICO operators are typically located outside the United States and raise funds from "a large investor base both inside and outside the United States".
The Quebec regulator played a key role in the Plexcoin case
Peikin said the SEC generally sees two types of violations of the securities law from symbolic bids.
"First of all, we see the ICOs that meet the definition of a security, but that are sold, traded or traded with US investors without meeting the requirements for registering federal securities laws, and secondly, we see the ICOs appearing to be real and frauds – in which broadcasters exploit excitement around the crypto-asset space to simply snatch money from investors, "he said.
Peikin said that international assistance received by the SEC in the regulation of the ICO sphere was "essential". For example, he noted that cooperation with the authoritative des marchés financiers in the Canadian province of Quebec led to the SEC charging two Canadian residents for their role in the fraudulent sale of Plexcoin tokens. He added that the commission will continue to work with other international regulators "to develop investigations awaiting ICO".
Increasing the popularity of ICOs obscures the risks
Peikin said that in recent years Ico have "exploded from a simple concept to a phenomenon". He added that the global ICO industry grew "22,000 percent" in just two years, comparing the "over $ 22 billion" collected by the ICO in 2018 with "less than $ 100 million" collected in the 2016.
"Growth in the ICO market can obscure the fact that these offers are often high-risk investments," said Peikin. "Issuers may not have an established track record, they may not have good products, business models, or the ability to protect digital currencies from hacker theft, and some of the offers may simply be frauds."
What is your response to Peikin's comments on the need for international cooperation in ICO investigations? Share your thoughts in the comments section below.
Images courtesy of Shutterstock, sec.gov, Wikipedia
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