SEC Enforcement Director Shares ‘More Substantial Remedies’ For ICO Registration Requirements
SEC’s Director Announces “More Substantial Remedies” For Anyone That Doesn’t Follow Registration Requirements For ICOs
The US Securities and Exchange Commission (SEC) has been working on regulations for the cryptocurrency for quite some time. Out of this work has come a statement from the co-director of enforcement – Stephanie Avarkian. In a speech on September 20th, she commented that the SEC would be primarily working on “more substantial remedies” for anyone that does not follow the protocols issues for initial coin offerings (ICOs).
A transcript of this entire speech is listed on the SEC’s website, offering clarity on the specific principles that governs the decisions that the SEC makes. It also brought up the ways that the SEC was going to handle the “misconduct” in ICOs and cryptocurrency.
Avarkian commented on how ICOs are presently a “novelty” to consumers, though the reason it becomes exciting is due to the “utility of the underlying blockchain.” However, based on the “exuberance” for ICOs, it is possible that this excitement could easily mask the fact that these investments are considered “high risk.” That is understandable, considering the fact that there are no true products, have a spotty business model, and can even be discovered by “outright frauds.”
So far, it seems that the SEC has worked to be more aware of the registration cases that actually follow the process and the requirements. It is important that investors have the opportunity to participate in legitimate ICOs, and the cryptocurrency industry needs them to thrive. However, with legal protection, anyone can make an investment safely.
To let investors know, the SEC has issued multiple public statements about the activity in this sector. However, one particular event in November got the most attention in their statement, which talked about how celebrities and other public figures have been promoting ICO’s. According to the “anecdotal evidence,” there’s been a “dramatic decline” in these endorsements lately. Basically, Avarkian noted that the issues regarding ICOs and cryptocurrency have to be handled by the Division of Enforcement, as related work is already making dividend payments.
The SEC has been having a busy week, and these statements round it out. The agency has also noted that they are working on a formal review process for the Bitcoin ETF that has been in the news lately with VanEck and SolidX. This particular case would use vitcoin instead of contracts, offering “comprehensive insurance” that would prevent the user from experiencing any kind of loss in their digital assets.
Before their annoucement on the Bitcoin ETF, SEC Commissioner Hester Peirce said that it is important that the government does not hinder cryptocurrency from developing new products.