Wealthman welcomes the SEC’s intention to increase the safety of investing in crypto-assets and ICO. For both investors and ICO founders, this trend is positive.

The SEC set to conduct the generic investigation of all initial coin offering
Recently, there has been a huge growth in the crypto market; however, it has also experienced many cases of scam. Therefore, the US SEC (Securities and Exchange Commission) has filed a number of lawsuits in recent months against allegedly fraudulent initial coin offerings (ICOs). Previously, the SEC used to examine only particular cases of violation of regulatory policies such as The DAO (sec.gov) or Munchee (sec.gov) in the effort to combat scams. The securities policies they follow today were formed back in the 1930s.

However, the hearing in the Senate entitled “Virtual Currencies: The Oversight Role of the US Securities and Exchange Commission and the US Commodity Futures Trading Commission” on February, 6th made it clear that the SEC is to conduct an inspection of all ICOs that are held, registered in or aim to attract funds from the USA.

As a result, the SEC is poised to constitute a set of strict laws. This will eliminate the obligation to adhere to scarce precedents, and introduce cohesive guidelines for those intending an ICO. This step will foster other first-tier countries to create their own regulations of crypto- and blockchain-related enterprises. Once the SEC has new regulations finalised, the rest of the world will look to them, at least until they have their own in place.

The four stages for the SEC to achieve the goal are:
  • - Scrupulous investigation
  • - Show trials
  • - Lawmaking
  • - Implementation

So far, the SEC has been making recommendations to alleged fraudsters to stop their activities and return accumulated funds to investors (as was the case with Munchee). However, recent statements and the general trend show that the new methods of the SEC will be severe and uncompromising.

Our experts believe that the entire cycle will take at least two years to complete.

www.wsj.com