Topic: SEC investor alert for ICO offerings (Read 440 times)

Why didn't the SEC alert investors about the Bernie Madoff fraud? Was the SEC simply unable to tell what a scam is?

SEC issued a good document stating that they have limited power to control ICOs so use them at your own risk.
They clearly stated they will try to go after fraud ICO's but stated they can't guarantee any results.

I think that even if the SEC decides to 'go after' developers, the courts could decide that ICO's are not similar enough to securities based on any number of tecnicalities, including the fact that many white papers explicitly state this while relying heavily on exclusion clauses. Also, when we consider the recent  federal court ruling which stated that gaming skins arent considered currency and therefore couldnt be taxed, it is likely that depending on the first case/s brought, a decision can be made by the courts on the smallest of technicality against the SEC (or in favor of it), which will have far reaching consequences.

http://www.marketwatch.com/story/sec-concludes-initial-coin-offerings-are-securities-2017-07-25

The Securities and Exchange Commission issued an investigative report on Tuesday concluding that tokens offered and sold by a "virtual" organization known as "The DAO" were securities and, therefore, subject to the federal securities laws. The regulator is cautioning investors that offers and sales of "initial coin offerings" or "token sales" by "virtual" organizations using distributed ledger or blockchain technology are subject to the requirements of the federal securities laws. Issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies. Participating in unregistered offerings may subject participants to civil or criminal enforcement proceedings. Securities exchanges trading in these securities must also register unless they are exempt. "The DAO" has been described as a "crowdfunding contract" but it would not have met the requirements of the Regulation Crowdfunding exemption because, among other things, it was not a broker-dealer or a funding portal registered with the SEC and the Financial Industry Regulatory Authority. However, the SEC decided not to bring charges in this instance, or make findings of violations in the Report, but use the results of the investigation to caution the industry and market participants.

I don't think they will go after investors now, but they surely will catch a couple of dev's to show an example.

Yes, no doubt these ICOs that are bringing in tens of millions can't afford tens of thousands to legitimize  their offerings. Might cut into bonuses and such.

I agree it will be difficult to regulate; but, that won't stop the US from trying.

The SEC is there to protect investors. Unless they adapt their regulations to make it easier for start-ups to understand and follow without hiring lawyers (who'll charge $10000s), I believe that the ICO industry (both genuine and fraudulent) will continue to thrive. The SEC's consultation could open the door to other countries adopting similar regulations, but I can't see how it'd be possible for them to regulate the generally anonymous nature of many ICO's, particularly when they lack the jurisdiction because no American is involved.

My favorite part is the warning signs section of investor fraud. Every single ICO so far has the majority of the warning signs listed.

https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_coinofferings