SEC Cracks Down On Crypto Security
Nov 07, 2018
Enthusiasts and investors alike are on the edge of their seat while many still continue to clutter up the industry and bring in some optimism to the crypto space whereas others are nervous and are showing concern to see what is happening of every minute of every day.
New reports have arisen which suggests that the Securities and Exchange Commission’s (SEC) main objective to remove scams related to digital currency. Funnily enough, these issues warranted almost no attention around two years but now they’ve become a common part of the industry that the organisation is seeking to ensure customer safety above everything else.
In particular, the SEC says that its goals include taking down any ICOs as it believes that they might not be following the rules. In the report, it calls ICOs high-risk investments as many lack viable products or established track records. The report also mentioned that many Initial Coin Offerings have ‘shady’ business models or are that they are unable to safeguard virtual assets from theft by hackers whereas other are completely fraudulent and operate under the guise of garnering business.
Behind the scenes
Over the past year, details have emerged which suggest that investors have lost around half a million of their money through fake ICOs. many works by offering investors access to new coins in exchange for funds. The investors then use these coins to get their hands on goods and services offered by the companies
While multiple ICOs are either complete or are maturing, there are plenty ICOs out there which have proved to be fake and they just disappear after six months with millions of dollars in their pockets from investors who didn’t know better left with useless coins and no money in their bank account.
In a section of the report titled ICOS and Digital Assets according to the SEC who stated:
“In the past year, the [enforcement] division has opened dozens of investigations involving ICOs and digital assets, many of which were ongoing at the close of FY of 2018.”
As said by Live Bitcoin News, actions being acted upon to Fraudulent ICOs are headed by the organisations Cyber Unit which became fully operational this year. In 2018 alone, the organisation has instigated around 20 standalone cases, 12 of which are against ICOs.
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