US regulators have expanded on their probing of Initial Coin Offerings (ICOs) that have raised red flags as fraudulent. The regulator has lately subpoenaed a number of ICOs that are suspected to have violated US security laws.
The Chairman of the SEC, Jay Clayton, recently said that most of the ICOs emanating from the US should be listed with the agency. The reason they should register is that most of their coins are traded on the secondary market.
For ICOs that are dragging their feet to get approval by the SEC, the Chairman said that he has no choice but to currently sanction them. The Cyber Unit Division is the department within SEC that is responsible for coordinating and issuing subpoenas.
One notable personality who had been subpoenaed is TechCrunch founder Michael Arrington, who last year launched an XRP based crypto fund. In a recent interview with CNBC, Michael admitted that his fund had been subpoenaed. He also said that every crypto fund he had talked to had also been served.
He was however optimistic about the events that are unfolding. He said that this is good for the industry as the SEC needs to set up rules. Mr. Arriington also added that the uncertainty in the US was a shame since some of the best ICOs were relocating out of the US. He went on to say that he personally focused on projects from Asia.
With the SEC not clear when it comes to setting up rules crypto funds, this has left many in the dark. Most of the ICOs that are set up in the US have opted to self-regulate or issue tokens as SAFT offerings while catering to qualified investors with large sums of money. Internationally, there are some ICOs that outright refuse investors from the US.