The U.S. Securities and Exchange Commission (SEC) has extended its crackdown on Initial Coin Offerings (ICOs), putting “hundreds” of projects in danger, as per a recent joint investigation by Yahoo Finance and Decrypt Media reported on Oct. 10. The authors of the report focused that hundreds of crypto and blockchain startups that conducted token sales
The U.S. Securities and Exchange Commission (SEC) has extended its crackdown on Initial Coin Offerings (ICOs), putting “hundreds” of projects in danger, as per a recent joint investigation by Yahoo Finance and Decrypt Media reported on Oct. 10.
The authors of the report focused that hundreds of crypto and blockchain startups that conducted token sales have ultimately found that they had disrupted securities laws in-spite of their endeavors to comply with regulations. In reply to SEC pressure, thousands of firms have allegedly “quietly agreed” to repay investors’ money and pay fines, relatively than attempting to reach a legal compliance.
As per Yahoo and Decrypt’s conversations with more than 15 industry sources, many startups that were commanded by the SEC did not know how to satisfy the commission’s needs and were unable to consult with other firms on how to control the matter.
The sources who are signified by employees of subpoenaed companies or their attorneys — favored staying anonymous due to an SEC restriction from disclosing the issue.
An unidentified securities attorney at a high-profile Silicon Valley organization told Yahoo and Decrypt that while “everybody’s holding their breath,” waiting for new rules, the SEC is not going to offer them. As specified by the anonymous attorney, while trading with the lately developed industry, the SEC still implements the “same laws, the same statutes, the same rules, to stocks and bonds and everything else.”
As earlier stated by Cointelegraph, there has been a “cascade of uncertainty,” connected with the prevailing ICO token classification, which only further muddles the development of badly needed regulations for ICOs.
Though major altcoin Ethereum (ETH) was introduced back in July 2015, the SEC cited that the digital currency would be planned as a security only in June this year. Regardless of calls for regulatory simplicity and comments from lawmakers that the ICO industry needs “light touch” regulation, the SEC endures its crackdown on ICOs.
As mentioned by a recent study by financial research company Autonomous Research, ICOs elevated$20 billion since the start of 2017, which is $18 billion more than the previous year. With that, more than 80 percent of ICOs that were directed in 2017 have been recognized as scams by the ICO advisory firm Statis Group in July. Still, the U.S. is remarked as the “most favorable” country for the ICO market, grounded on the amount of funds upraised by top companies in the field.
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