Home / Cryptocurrency / Legal actions based on cryptocurrency have tripled in 2018 • Live Bitcoin News

Legal actions based on cryptocurrency have tripled in 2018 • Live Bitcoin News

The lawsuits related to cryptocurrency have increased by about 300 percent this year, with about 45 separate cases making their way in 2018 during the first six months.


Do not forget to register!

The Securities and Exchange Commission (SEC) is not playing well anymore. The organization made it clear that anyone who sends innocent participants and their money will pay the price, and it seems that initial coin offerings (ICOs) are at the center of the SEC's focus. Currently, about 30 percent of the cryptographic lawsuits this year expect the SEC to oppose fraudulent or unregistered ICOs.

Two of the biggest cases occurring in recent weeks are those against Carrier EQ (also known as AirFox) and Paragon Coin. Both companies have held ICO last year and made a lot of money in the process. The suits did not cover the ICOs themselves – the SEC did not accuse the companies of handling fraudulent schemes – but rather the lack of registration on the parts of the executives.

SEC

How the process works

Each ICO must be registered accordingly with the SEC, provided they are titles. The process is in place to protect investors and their funds, and the SEC claims that both companies failed to register properly with officials. Therefore, Paragon Coin and Carrier EQ must do so if they want to continue doing business in the United States in the future. In addition, they may be required to repay investors, and both have been slapped with a $ 225,000 penalty that must be paid to the SEC.

In a recent statement, the SEC explained:

However, market participants must adhere to our well-defined and well-functioning federal legislative framework when it comes to technological innovations, regardless of whether the securities are issued in certified form or using new technologies, such as blockchain.

The SEC is blocking fraudulent ICOs.

We are watching you!

The organization also discussed some of its latest expectations for decentralized exchanges based on smart contracts, stating:

A platform that offers trading in digital equity and operates as an "exchange" (as defined by federal securities laws) must register with the Commission as a national stock exchange or be exempted from registration.

In the end the fraud will disappear completely?

The SEC moves mean huge changes in the cryptography industry. First, regulation is becoming much stricter and government organizations such as the SEC are probably keeping a broader eye on illegal or unregistered activities.

At the same time, the change is positive, in the sense that fraud could decrease significantly as businesses, hopefully, would think twice to get caught before embarking on the wrong path.

Does the SEC have the right to invoke such strict rules? Why or why not? Post your comments below.


Images courtesy of Shutterstock

Tags: Carrier EQ, cryptocurrency lawsuits, ICO, Paragon Coin, SEC

Source link