Reducing Crypto Scams is Top Priority States U.S. SECNovember 4, 2018
In its latest Annual Report, the regulatory authority of USA, the U.S. Securities and Exchange clarified that bringing down the numbers of cryptocurrency based scams is their top priority. Particularly with ICOs. The ICO is one of the important areas were scams are prevalent and the authority is focusing on reducing those scams.
This report and the explanation from the authority is coming at a point in time, when there is an increase in the numbers of crypto scams either due to the public interest in the money-making capabilities of cryptocurrencies or due to the viral nature of investor interests that is likely to fall trap to intelligent tricks by scammers.
The intelligent tricks of scammers appear too good that investors land up investing their money to their story.
The SEC under the section “Focus on the Main Street Investor,” states that their major objective is to protect the interests of retail investors. The authority has to state that these investors are exploited because they do not have the appropriate technical knowledge to crack down to understand the reality of the offers. This is happening due to the unregulated nature of the industry.
The SEC is launching several initiatives in order to bring down fraud in the cryptocurrency and the DLT industries.
The authority states, “Additionally, in partnership with Division’s Cyber Unit and Microcap Fraud Task Force, and the Division of Corporation Finance’s Digital Asset Working Group, the RSTF has launched a lead-generation and referral initiative that involve trading suspensions related to companies that purport to be in the cryptocurrency and distributed ledger technology space.”
When it comes to ICO based regulation, they have to state that they have raised 20 standalone cases on different ICO companies who have been allegedly charged with legal misconduct by misleading their investors.
On talking about the strategy they use to control the financial fraud and misconduct in the nascent market, they have to state that they are focusing on improving public awareness about the kinds of frauds taking place in the industry. They have been prosecuting cases against companies to the full extent permitted by law. They have required issuers to work with appropriate broker-dealer licensing if they are issuing tokens, eventually holding the platforms responsible with respect to the quality of tokens issued.
While the SEC is very particular about bringing down fraud in the crypto industry, they are yet to come up with their regulatory framework that exclusively focuses on cryptocurrencies and the ICOs. This they are to do as opposed to making use of laws that were originally geared towards traditional investments.
The major regulatory agency of Thailand is known as SEC, and it regulates the markets by making use of particular frameworks which are designed to help the crypto market explore the best possibilities at the same time reducing fraud and misconduct.
Whether the U.S. SEC will come up with a customized regulatory framework for cryptocurrencies is something that we are yet to witness.