Following calls to regulate an industry that has remained largely unregulated, the U.S. Securities and Exchange Commission (SEC) has reportedly taken dozens of actions against illegal ICOs in the fiscal year that ended Sept. 30.
Before the majority of the ICOs were shut down, the SEC noted in its annual report that at least three of the token sales it successfully took actions against had hitherto raised a combined $68 million from investors.
Although that may sound like a paltry sum given the fact that ICOs have generated more than $3.945 billion, the SEC has stepped up its game as it plans to increase its enforcement of ICOs and other crypto related activities.
In its annual report, the SEC states that “Given the explosion of ICOs over the last year, we have tried to pursue cases that deliver broad messages and have a market impact beyond their own four corners,”
In a bid to curb fraud and other related concerns in the crypto industry, in September 2017 the SEC announced the set up a Cyber unit. Since inception, the unit has been able to quash a number of cyber-related misconduct. This year alone, the SEC’s enforcement efforts have impacted a great deal, especially in areas where the federal securities laws intersect with cyber issues.
According to the SEC, “the Commission brought 20 individual cases, including those cases involving ICOs and digital assets,” Announcing the close of its fiscal year, the commission announced that it had over 225 cyber-related investigations ongoing.”
The commission further added that “While many of these cases have involved allegations of fraud, the Division also has pursued enforcement actions to ensure compliance with the registration requirements of the federal securities laws. In the past year, the Division has opened dozens of investigations involving ICOs and digital assets, many of which were ongoing at the close of FY 2018.”
Besides targeting ICOs, the commission also stated that it is going after organizations and entities who act as unregistered broker-dealers, expediting token sales.