And so it begins, the SEC charges two ICOs with defrauding investors
I must say, if the SEC cracks down on clear scams this is a good thing. I posted very recently asking the question of why people would want to use the blockchain to purchase something like real estate?
The Securities and Exchange Commission today has charged both a diamond and a real estate initial coin offering scheme with defrauding investors.
REcoin, which promoted itself as the first cryptocurrency-backed real estate company and DRC World, a diamond company, are owned by businessman Maksim Zaslavskiy. In a statement, the SEC accuses Zaslavskiy of selling unregistered securities and coins that don’t exist to unsuspecting investors under these companies.
For owning something like real estate or stocks I do not see a significant advantage to using the blockchain because in many cases you have less security in terms of maintaining ownership. Many of us (myself included) have lost private keys and this is something which doesn't typically happen with legal ownership. That isn't to say legal ownership is definitively safe but merely that it is more likely that you will lose your private keys than lose your ownership of stocks.
The SEC so far is targeting the unpopular ICOs or ICOs which clearly are scamming people. What will happen when the SEC targets a popular ICO which made a lot of people money and which clearly is not a scam? The last time the SEC targeted something popular it was Satoshi Dice but that was not an ICO. What can we learn from the SEC's behavior about their current priorities and are they any clues about what their future priorities might be? If it's merely going after scammers then I'm all for that but there will probably be a tipping point where regulation becomes unpopular in this space.
The U.S. government has since obtained an emergency court order to freeze Zaslavskiy’s and his companies’ assets.
Though these appear to be the first initial coin offerings, or ICO’s, to come under fire for fraud, they certainly won’t be the last.
Can you given an example of such an ICO?
There are many scammy ICOs so I expect we're gonna see many similar announcements in the near future from the SEC.
I would love to hear SEC's opinion on Bitconnect. I wonder if they have an active investigation on that crypto.
The problem is a political one. The SEC is no different than the IRS. It is someones pitbull unleased from a centralized cabal type of command. Disruptive tech threatens every aspect of the status quo. I expect the SEC to slowly put the hammer down and I believe they will try this with the most r/evolutionary of the ICO's that are yet to come. This first one it seems was an easy/primer target. Testing the waters...
Ive been waiting for this to happen.
When scammers see something that looks like a golden goose they want to wring its neck and kill it with their greed.
The majority of the general public who are jumping onto ICOs do not really understand what blockchain is really about. They just see how Bitcoin has become big and want to make it rich by not missing out. FOMO is what its called. Fear Of Missing Out. Scammers know all about FOMO.
This is not a good development for crypto-currency and blockchain as it will only add a further dark cloud that the sceptics and the doubters will use as a weapon to discredit Bitcoin and other genuine crypto currencies.
I mean I see new ICOs coming almost daily these days. Come on, how can this be a good thing. People need to wise up and read what blockchain is really all about.
I beliefe that the SEC is doing good in regulations if you compare it to china where they are closing all the exchanges just to get a hold on them.
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This may be really cynical but what if the SEC created these very ICO's out of thin air to bust, just to flex their muscles?
I wouldn't go that far down the conspiracy rabbit hole, but maybe they held back a bit to see how the space developed, and once they saw how many scams started to flourish, they decided to become more active with enforcement.
I have to really try to think, think, think as Pooh would say, to see the possibilities of what is really going on in the 'WAR ON CASH.' It is easy to forget that this is a war and this means always looking beneath the surface. They probably had their eye on this guy, tried to hire or buy him out out and he said no..
"What will happen when the SEC targets a popular ICO which made a lot of people money and which clearly is not a scam?"
Let's hope there is enough low-hanging fruit around to make this a way's off yet.
Thanks for the update.
This is interesting about how the SEC is getting involved yet on a small scale @dana-edwards. Yes there will be more ICO Scams and hopefully enough people get caught to keep this behavior to a minimum.
Good Point
Right and why I don't even want to bring up that I lost .25 eth to a shapeshift look alike phish scam site cause I don't want it to deter others.. however also have to spread word to keep these nefarious activities profitability to a minimum.
essentially we have to be careful in investing, many brokers who offer various bonuses and sweet promises, high risk becomes a recommendation for us
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Interesting read up, im sick and tired of seeing scammy coins appearing in adverts all over the web -_-
Seems to be part of the nature of innovation
Makes finding real ICOs a dodgy business...
It's the nature of the cutting edge....
Thanks for sharing.
Upvoted and resteemed :-)
Thank you for sharing information. good post @dana-edwards
It was bound to happen. Charlatans won't get their way.
We are still in the very early stages of cryptocurrency development. It's just like the Wild West. Be careful because anything goes. There is lots of opportunity, but also many scams!
Good read on ICO's
https://hackernoon.com/most-icos-fail-tale-of-two-worlds-d1ab7625ff66