Jay Clayton, Chairman of the United States Securities and Exchange Commission (SEC) has articulated his concern that most ICO investors do not fully understand the “substantial risks” associated with initial coin offerings.
Also Read: A Phone Call From SEC Pressures ICO Startup to Close Operations and Refund
The SEC Does Not Believe That the Majority of ICO Investors Are Adequately Informed of the Risks Associated With Initial Coin Offerings
The SEC chairman expressed his concerns whilst participating in a panel discussion at New York University. During the event he emphasized his concern that many ICO investors do not fully comprehend the risks associated with initial coin offerings, stating “I am not comfortable that the American investing public understands the substantial risks that we face systemically from cyber issues”.
Clayton was joined by co-directors of the SEC’s enforcement division, Stephanie Avakian, and Steven Peikin. Throughout the discussion the SEC representatives highlighted a number of the commission’s principal concerns, including a rising number of cases involving the theft of information by hackers seeking an advantage in the markets, and inadequate disclosure of key information pertaining to many initial coin offerings. ICOs were largely presented in a negative light, with Steven Peikin describing initial coin offerings as comprising “roaches” that crawl out of the woodwork and try to scam money off of investors.”
The SEC Has Created a Group of Approximately 90 Individuals Tasked With Examining the Developments Within Distributed Ledger Technology Industries
Peikin revealed that the SEC has created a working group of approximately 90 people tasked with examining emerging trends and innovations within the distributed ledger technology industry. Clayton stated the existence of group does not signify a dramatic shift in the SEC’s enforcement policies, and that the commission’s primary aim is to protect retail investors from harm.
The discussion comes following an increased regulatory presence from the SEC with regards to the ICO and cryptocurrency industries. Earlier this week, reports alleged that a phone call from the SEC had prompted the cessation of Protostarr’s ICO. At the end of August, the SEC also suspended the trading of four companies for having made “claims regarding their investments in ICOs or touted coin/token related news”. At present, the SEC is seeking to prevent the issuance of securities through token sales, implying that the distribution of utility tokens through ICO currently does not violate financial regulations.
Do you think that SEC is likely to intensify it’s regulatory actions against ICOs? Share your thoughts in the comments section below!
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The post SEC Chairman Believes ICO Investors Do Not Understand Risks appeared first on Bitcoin News.
via Samuel Haig
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