SEC Enforcement Division Says ICOs a Vehicle For Fraud
SEC Enforcement division says regulation is necessary to prevent fraud in ICOs
During a speech given at a Securities Enforcement Forum on Thursday, the co-director of the Securities and Exchange Commission (SEC) Enforcement Division, Stephanie Avakian made it clear that the commission sees the need for strict digital enforcement when it comes to ICOs.
While the SEC sees and affirms the power of Blockchain technology, they are nevertheless fully aware of the danger that such digital technologies pose as a vehicle for fraud. The risk toward investors and the general public must be mitigated, according to the commission’s view. The co-director said:
“Blockchain technology presents many interesting issues and can of course present legitimate opportunities for raising capital. But, like many legitimate ways of raising capital, the popular appeal of virtual currency and Blockchain technology can be an attractive vehicle for fraudulent conduct. We think that creating a permanent structure for the consideration of these issues within the Cyber Unit will ensure continued focus on protecting both investors and market integrity in this space.”
The SEC has already made it clear that they will treat tokens as securities in many cases, driving fear into the ICO market. These recent statements only reaffirm the reality that governments are increasingly seeing the need for oversight in the field.
While this news may come as a negative for some, others have argued that clearing out the ‘riffraff’ of the ICO world would actually improve the overall marketplace.