US Regulators have targeted ICOs as their primary enforcement objective when it comes to cryptocurrency regulation. The aggressive stance by the Securities and Exchange Commission and the Commodity Futures Trading Commission have all by wiped out the ICO market in the United States.
One of these ICOs that finds themselves in serious trouble is Blockvest which claimed they had “regulatory approval” for their crypto fund. The company went as far as to use the SEC seal in their promotional material. This is something that US regulators don’t take lightly.
Blockvest will most likely find itself having to return all funds it has raised so far plus interest. The company may also find itself facing severe fines and penalties for securities violations. US regulators and courts have established that ICOs fall under the jurisdiction of the SEC and the CFTC.
Regulatory action is not just limited to federal regulators some state regulators are also going after fraudulent ICOs. North Dakota Securities Commission is going after Crystal Token which claimed a two percent per day profit for any holders of its coin.
These are only the tip of the iceberg when it comes to enforcement. There are reports that the number of ICOs under SEC investigation could be in the hundreds. The amount raised in ICOs in the United States last year could be as high as $20 Billion.
Until the SEC and CFTC complete their purge of all of the fraudulent ICOs, it will most likely mean that the United States will fall behind regarding innovation. There is a need for greater clarity on cryptocurrency regulation, and new laws are desperately needed.