The US government has targeted several ICOs over the last few months for incorrectly marketing their tokens as securities.
Although there hasn’t been much in the way of regulatory action, it seems that something is starting to brew in the United States government with regards to the regulation of cryptocurrencies and ICOs. The crypto market is booming bigger than ever before, and with the hype have come a few high-profile cases of ICOs gone wrong.
Tezos has been hit with several class-action lawsuits seeking refunds for ICO participants who were allegedly misled regarding whether or not the tokens they purchased during the ICO were securities. The Confido ICO “exit scam” resulted in the involvement of the FBI.
More recently, the SEC successfully forced the shutdown of the Munchee ICO. ‘MUN’ tokens were found by the SEC to be legally classified as securities, and it was subsequently determined that Munchee was not following US securities laws appropriately. Munchee, which was raising funds for an app that would act as a blockchain-based platform for restaurant reviews, was forced to refund its ICO participants.
Additionally, the founder of PlexCoin was sentenced to a two-month sentence in Canadian prison after failing to follow orders from the Canadian Government and the SEC to cancel the sale and freeze assets.
While cases of the US government taking action against ICOs are still rather few and far between, the frequency of such incidents is certainly increasing. The US government has not taken any strong action to place sanctions on cryptocurrency in general, but the government’s awareness surrounding the world of crypto seems to have been heightened.
Warnings, But No “Rules”–Yet
On December 11, SEC Chairman Jay Clayton issued an official statement warning of the risks associated with ICOs and cryptocurrency in general.
Acknowledging the crypto hype, Clayton wrote that global social media was abuzz with “tales of fortunes made and dreamed to be made.” However, Clayton also cautioned that “If an opportunity sounds too good to be true, or if you are pressured to act quickly, please exercise extreme caution.” Clayton specifically mentioned ICOs that promise returns as being particularly suspicious.
Source/More: SEC Cautions ICO Investors; Is the US Government Cracking Down on Crypto? | Finance Magnates
