SEC Will Start Going After Illegal Crypto ICOs Even Harder

The SEC will start going after illegal crypto ICO projects even harder than it did before since some of the illegal token sales cannot be trusted to pay back the investors. Let’s find out more about it in the latest crypto news.

Two years after the ICO craze and some of the projects were pronounced dead due to the harsh sanctions from the regulators. According to the Wall Street Journal, the blockchain-based security startup Gladius has closed its shop despite raising more than $12 million during its 2017 ICO. The company managed to avoid paying the fine from the SEC (Securities and Exchange Commission) for selling unlicensed securities.

Despite escaping the fine, Gladius says that it was no longer capable of continuing with the business because of a lack of funds. An attorney for the company George Mastoris said that Gladius failed to attract new investors to save the business. For the SEC, Gladius’ predicament only explains the stance that the SEC has against unlicensed crypto token sales. The SEC has originally ordered the company to file the disclosures as a part of the settlement and with the company going under; it seems that the disclosures will not be filed. There is the matter of more than 1,700 investors who participated in 2017 token sales.

As it was previously reported, the ICO market is still dying since the token sales are down by more than 95 percent in 2019. During the bear market in 2018 and the litany of indictments and fines that were put upon the ICO projects, it seems that this cooled down the interest in the token sales. The SEC will still fight for harsher regulations and projects such as Airlox have also failed to meet up with the terms of their settlement deals with the agency.

The SEC will consider even higher fines against the indicted ICO projects and with the financial health of the blockchain startups, hefty fees may not amount to much. Some of the commentators have pointed out that the startups that want to follow regulated channels for their token sales, end up incurring a very expensive financial burden than their unregulated counterparts.
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