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In the last annual report of the SEC (Securities and Exchange Commission) of the Commission, the regulator explained that reducing the number of cryptocurring related scams is currently among their main priorities. The report specifically cites initial coin offerings (ICOs) as one of the sectors of the industry on which they are focusing.
The report comes in the midst of an exponential increase in encrypted scams that is the result of an increase in public interest and the complex nature of the industry that leads many novice investors to fall prey to wise scams.
Cryptocurrency, DLT and ICO Markets Their primary objectives
In a section of the report titled "Focus on the Main Street Investor", the agency explains that their main objective is to protect traditional retail investors from falling prey to complex scams that specifically target their lack of technological knowledge.
Of course, the cryptocurrency industry is one of these industries that has a problem with scams due to its unregulated nature, and the SEC states that they are launching more initiatives with partner agencies to reduce fraud in the crypted sectors and DLT.
"In addition, in collaboration with the Division's Cyber Unit and the Microcap Fraud Task Force, as well as with the Digital Asset Working Group of the Corporation Finance Division, RSTF has launched a reference generation involving commercial suspensions relating to companies that claim to be in the space of cryptocurrency technology and distributed space. "
As for the ICO regulation, they explain that only in 2018 have already submitted 20 independent cases against ICO companies accused of misbehavior and / or misleading investors.
"Since the formation of the Cyber Unit at the end of 2017, the attention of the Division on incorrect conduct linked to cyber has increased steadily.In 2018, the Commission presented 20 stand-alone cases, including cases concerning ICO and digital assets At the end of the fiscal year, the Division had more than 225 cyber investigations underway. "
Regarding their strategy to reduce fraud and bad conduct in nascent markets, they claim to have focused on increasing public vigilance on the amount of fraud, pursuing cases until the full extent of the law, requiring that issuers have the appropriate broker-dealer license to offer tokens and taking into account quality platforms offered tokens.
Although the SEC is inclined to reduce fraud, it has not yet established a formal regulatory framework specifically focused on cryptocurrencies and ICOs, rather than on the use of existing laws geared towards traditional investments.
The main regulatory agency in Thailand (also called SEC) is an example of an agency that regulates markets through the use of specific frameworks that are designed to help markets progress while reducing frauds and bad conduct.
The Thai SEC states that, as far as ICOs are concerned, funding must be made through authorized sites and that token issuers must receive licenses from the government:
"ICO fundraising must be carried out through an ICO approved SEC portal. ICO acceptance criteria may include due diligence and screening of lenders from dishonest people.The source code of the smart contract will automatically be applied against contract After the sale, the SEC publishes a copy of the declaration on the SEC website. "
At the moment there are no signs that the US SEC will release a similar framework designed specifically for cryptocurrencies and token offerings, but until then it is likely that allegations of fraud and misconduct will continue to grow.
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