Illegal ICOs Paid a Quarter of SEC’s $4.68 Billion Crackdown

The United States Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission (SEC) has published its annual report for FY2020, revealing that its enforcement division collected over $4.68 billion in disgorgement and penalties. A quarter of that amount came from the bust of Telegram’s Gram token sale.

The money collected as disgorgement and penalties by the regulator hit a record last year. In the previous year, the SEC collected $4.3 billion, meaning there was a roughly an 8 percent increase in FY2020.

The SEC took action against a total of 715 cases that ranges from securities offerings, insider trading, and market manipulation. Out of the total collected proceeds, the regulator has already distributed $600 million among the victims.

SEC vs ICOs

Though the market watchdog penalized many financial companies for regulatory violations, the amount that came in from illegal ICOs become significant. The enforcement body collected $1.26 in total from eight illegal ICOs.

Telegram alone was forced to return $1.2 billion to Gram token investors and pay an additional $18.5 million in fines. The encrypted messaging platform alone paid 26 percent of the total amount collected by the commission.

Telegram raised around $1.7 billion from selling Gram tokens to accredited and professional investors for launching its ambitious Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term network. But, the project came under the radar of the SEC, resulting in a court battle that forced Telegram to shelve its plans.

Another high profile ICO took down by the SEC last September was kik’s. The Canadian company was fined $5 million for selling unregistered securities to the US-based investors.

The other six ICOs in the list include Bitclave, Shopin, NAC Foundation, Unikrn, Boon Tech, and Bitcoiin2Gen that together contributed around $40 million to the SEC seizures.

Additionally, the regulator detailed that its whistleblower program hit a record in FY2020, as 39 individuals received around $175 million.