The Securities and Exchange Commission’s newest enforcement arm froze an initial coin offering accusing a Quebec company of defrauding investors of $15 million. These were the first charges filed by the SEC’s Cyber Unit, which was created in September 2017 to better regulate cyber activities, including ICOs, the unregulated vehicles entrepreneurs use to raise funds by selling new cryptocurrencies.
Marc Boiron, who was interviewed by the Daily Journal noted the SEC several months ago charged two other entities with promoting allegedly fraudulent ICOs. Cryptocurrency offerings are attractive, relativity easy targets for regulators, according to Boiron.
He also cited the example of the of the Cyber Unit’s first target, PlexCorps, that allegedly told potential investors its virtual currency would yield a 1,354 percent profit in less than 29 days.
“Ninety to 95 percent of these ICOs are not quality or are actual scams. The fact that (the SEC) is going after actual scams as their starting point is a good thing,” he said.