The SEC continues its scrutiny on cryptocurrency projects by expanding their crackdown on initial coin offerings (ICOs). The watchdog’s heavy involvement in crypto by way of scrutiny is putting a lot of crypto projects at risk according to a study done jointly by Decrypt media published and Yahoo finance. The report writers stressed the point that many blockchain and crypto startups that had conducted ICO’s, later found themselves to have breached securities laws despite their best efforts to comply with regulations. Most of these startups have had to bow to pressure from the SEC, most of them opting to refund money to investors as well as pay heavy fines instead of trying to get into a legal tussle against the SEC.
According to the findings of Yahoo and Decrypt, most of the firms that were subpoenaed by the SEC had no idea how to satisfy the demands of the exchange commission and had no way to know how to since there were no firms that knew about the matter to consult with. The more than 15 industry sources that provided yahoo and decrypt with the research data were employees of subpoenaed companies and their attorneys. These sources preferred to stay anonymous due to a restriction by the exchange commission on disclosing the matter.
An anonymous source at a high profile silicon valley firm told Yahoo and Decrypt that the industry was waiting with baited breath for the SEC to provide new rules but to no avail. The source also expressed disappointment that the exchange body still applies the same rules, and statutes to crypto as they do to stocks and bonds despite crypto being a new and totally different technology. The SEC actions or inactions have led to a cloud of uncertainty forming around the crypto community. Despite calls from industry authorities and lawmakers alike for the SEC to provide clear guidelines, the body still continues the crackdown on ICO’S.
The securities and exchange commission (SEC) has remained vague on issues surrounding crypto leading to a lot of uncertainty and confusion. For instance, the SEC only stated this June that major Altcoin Ethereum would be regulated as a security despite the coin being in existence since 2015. The SEC appears relentless in its ICO crackdown perhaps buoyed by a statistic released Autonomous research showing that ICO’s raised 20 billion in 2017 with more than 80 percent of these ICOs being scammed as identified by the advisory firm statis group. Despite that harrowing statistic, the United States remains the most favorable country for the ICO market.