The SEC has published a report referring to the control activity carried out during the last year in which it confirms its attention to the risks related to ICOs, given their explosion during the period 2017/2018.
This report once again sets out the firm points of the American supervisory body’s activity: investor protection, the focus on individual accounting elements, the attention to technological changes and innovations, the definition of effective practices and regulations to be imposed.
The focus of attention, however, is taken by the ICO phenomenon with more than 30 mentions, a number to be compared with the 4 in the 2017 report and with dozens of investigations launched during the year, many of which are still active.
The report obviously also points out the risks surrounding ICOs with some examples of fraud deserving special mention.
One example is AriseBank, a decentralized bank that has launched a failed ICO; other tokens mentioned are the Titanium Blockchain Infrastructure Services, which had raised $21 million with false company prospectuses, and the TokenLot, an “ICO Superstore” which was heavily sanctioned for selling security tokens illicitly, but then reached an agreement with the SEC.
A special case is that of 1Broker, an international securities dealer who was suspected of violating federal law by selling bitcoin-based swaps.
Overall, SEC lawsuits against ICOs or digital-related activities in 70% of cases also involved individuals promoting these initiatives, usually top managers at CEO or CFO level, but also auditors and accountants.
Investigations in high technology sectors also involved the new Cyber Unit, a section created specifically for the management of problems related to the digital world.