• 288 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 290 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 690 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 700 days Big Tech Disappoints Investors on Earnings Calls
  • 701 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 703 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 707 days Crypto Investors Won Big In 2021
  • 707 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 708 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 710 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 714 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 715 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 717 days Are NFTs About To Take Over Gaming?
Intel Joins Russian Exodus as Chip Shortage Digs In

Intel Joins Russian Exodus as Chip Shortage Digs In

"Intel continues to join the…

Could Crypto Overtake Traditional Investment?

Could Crypto Overtake Traditional Investment?

Despite recent volatility, there is…

  1. Home
  2. News
  3. Breaking News

SEC Targets Initial Coin Offerings In Latest Crypto Crackdown

SEC

The SEC’s had enough of initial coin offerings (ICOs) that have managed to raise $8 billion since 2016 even though their lofty projects don’t exist beyond a simple whitepaper.

Now it’s striking back, a bit late in the day, with the Wall Street Journal reporting—unconfirmed—that the SEC has already issued "scores of subpoenas".

But it’s always easier to target the big fish—like blockchain darling Overstock.com (NYSE:OSTK)—than it is to dig into the sea of rotten ICOs that have crashed and burned, some of them before raising any money, but many after fleecing investors for all they’re worth.

ICOs make it incredibly easy to raise money. Armed with nothing bigger than a whitepaper, they’ve defeated regulators with ease.

While the SEC hasn’t confirmed its apparent barrage of subpoenas, many believe the regulatory body is finally getting serious.

SEC Chairman Jay Clayton recently hinted as much, telling a Senate hearing: 

"With the support of my fellow Commissioners, I have asked the SEC's Division of Enforcement to continue to police these markets vigorously and recommend enforcement actions against those who conduct ICOs ... in violation of the federal securities laws.”

Related: Can Gold Survive More Interest Rate Hikes?

But Overstock is probably not the best target—or, indeed, the real target. It has, however, been caught in the crossfires. The stock lost 10 percent in early Thursday trading on news the night before that it the SEC had requested "certain documents related to the Offering and the Tokens in connection with its investigation."

It looked set to close a bit higher, sitting 6 percent down before the bell.

Overstock made it onto the SEC list because its subsidiary, tZero, is raising $250 million through a token sale—part of its joint venture to launch a digital coin exchange. It was the announcement in the third quarter of last year that tZero would enter digital trading that sent OSTK shares soaring. Its shares are up some 200 percent over the past 12 months.

As the holder of one of the largest blockchain-focused exchange-traded funds, Overstock is an obvious target.

And no one’s surprised that the SEC is targeting ICOs; though many are wondering why it took so long.

The regulatory body’s goals, however, remain unclear. There is much chatter in the space as to whether the SEC is trying to enforce or deter. It may, indeed, be a way to get new ICOs to seek regulatory approval on their own, up front.

The recent acquisition of the Poloniex crypto exchange by Goldman Sachs-backed Circle is a case in point. According to the New York Times’ Nathaniel Popper, the SEC told Circle it would not pursue enforcement action against Poloniex if Circle moved to seek the appropriate regulatory approval to operate the token exchange.

By David Craggen for Safehaven.com

More Top Reads From Oilprice.com:

Back to homepage

Leave a comment

Leave a comment