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SEC Chairperson Jay Clayton Lauds NASAA for Sweeping Out Fraudulent ICOs, Crypto-Asset Investments

May 24, 2018 14:18
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It is no secret that regulatory bodies in the United States of America are targeting virtual currencies and Initial Coin Offerings (ICO) with a never-before-seen vengeance.

A recent report by North American Securities Administrators Association (NASAA) stated that members from more than 40 jurisdictions throughout North America participated in “Operation Cryptosweep,” which to date has resulted in nearly 70 inquiries and investigations and 35 pending or completed enforcement actions related to ICOs or cryptocurrencies since the beginning of May. NASAA members are conducting additional investigations into potentially fraudulent conduct that may result in additional enforcement actions.

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Joseph P. Borg, NASAA President and Director of the Alabama Securities Commission said, “The persistently expanding exploitation of the crypto ecosystem by fraudsters is a significant threat to Main Street investors in the United States and Canada, and NASAA members are committed to combating this threat.”

Keeping in line with that thinking, Securities and Exchanges Commission (SEC) chairperson Jay Clayton issued a statement lauding NASAA for specifically bringing ‘fraudulent’ ICOs under scrutiny.

In a statement Clayton said, “I applaud our fellow regulators in the United States and Canada who are coordinating and participating in efforts to police fraud in the Initial Coin Offering (ICO) markets. These state and provincial regulators play a critical role in protecting Main Street investors.”

He added, “The enforcement actions being announced by NASAA should be a strong warning to would-be fraudsters in this space that many sets of eyes are watching, and that regulators are coordinating on an international level to take strong actions to deter and stop fraud.”

Bringing his point home, Clayton referred to the recent fake ICO that the SEC had put up on their website to allegedly warn of investors of the pitfalls of investing in companies without doing a thorough background check first. He added that investors should refer to a list of sample questions that need to be kept in mind while considering a cryptocurrency or an ICO.

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