Initial Coin Offerings Getting Cracked Down by the SEC Using Subpoenas
An insider announced that US regulators are sending subpoenas to various organizations which they suspect to be abusing laws and regulations connected to securities. This is an effect of the increasing number of Initial Coin Offerings.
The major concern of the SEC is that there are a lot of ICOs cropping up everyday which raise millions of dollars via crowdsale. The dark side of this matter of fact is that, most of these organizations don’t even exist.
The office of SEC has issued subpoenas to firms and people behind ICOs that it thinks may infringe upon the law, said the individual who requested not be named as these inquests are not made public.
In the process of Initial Coin Offerings, organizations sell crypto tokens, some of which have a utility and others not. These tokens could be redeemed or sold when these gets listed on exchanges. Ever since the current wave of ICO, the market is red hot.
As within seconds some ICOs raised billions. Some vanishes just like loopX. And some stick back reaping huge benefits for its investors. ICOs like Ethereum and NEO has shown to the investors that from a few cents to millions is not the hard way. And as a reason, the average investor in the fear of missing out, invest in any ICO without proper research.
Jay Clayton, as senior official from the SEC has stated multiple times that a large number of ICOs must be registered with an agency. The reason is that, cryptos are just like other securities. After the issual they trade on exchanges just like the financial instruments which are controlled by the SEC.
SEC Enforcement Division’s internet section is being the issual of the subpoenas. This unit was founded last year for the very same purpose. But then the ICO wave was not huge as it is right now.
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