The head of the U.S. Securities and Exchange Commission (SEC) expressed concern today that initial coin offerings (ICO) may be exposing buyers to possible fraud.
"This is an area where I’m concerned about what’s going to happen to retail investors," he was quoted as saying.
And recent actions by the agency support Clayton's stated fears. On Tuesday, the SEC unveiled a new cyber unit dedicated in part to policing "violations involving distributed ledger technology and initial coin offerings."
It was earlier this summer that the SEC formally outlined its intention to police activities around ICOs, declaring that it would consider tokens issued in such sales as securities offerings in some instances.
As part of that release, the SEC revealed the findings of an investigation into The DAO, the ethereum-based funding vehicle that collapsed in the summer of 2016 following a fatal code exploit.
"U.S. federal securities law may apply to various activities, including distributed ledger technology, depending on the particular facts and circumstances, without regard to the form of the organization or technology used to effectuate a particular offer or sale," the agency said at the time.
Image via YouTube
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.