The U.S Securities Exchange Commission [SEC] not only acts as a bridge between Bitcoin space and an ETF but also for the crypto-space and tokens that are classified as securities. However, one of the most prominent roles the commission plays is being the guardian of investors, ensuring that all the necessary measures are taken in order to keep them safe from scams, standing in as one of the key regulatory authorities of crypto-market.
Over time, the commission took the main stage by taking down scams and unregistered securities offerings, even taking action against the likes of Telegram, EOS, and Kin. Moreover, SEC charged Jonathan Lucas, founder and CEO of an online adult marketplace with fraudulent ICO scam, alleging that Lucas had raised $63,000 in crypto via “fraudulent offer and sale of unregistered digital securities of Fantasy Market,” at the beginning of August 2017.
The scams in the cryptocurrency market was one of the topics that were discussed at SEC’s Fort Worth Branch, during a 90-minute event earlier this week. At the event, David Peavler, SEC Director of Fort Worth Office, stated that office was investigating several crypto frauds, than its usual oil and gas fraud offering, according to Dallas Business News.
The SEC Director said,
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“Cryptocurrency fraud is, at its heart, just a good old-fashioned offering fraud and Ponzi scheme. It is the offering fraud de jour and it is going to be that way for a while.”
This aside, the commission has time and again released reports and raising red flags for investors and stating what they should look for when it comes to investing in digital assets. A report released in April 2019 had listed six signs to look for to identify a scam/ fraud: guaranteed high investment returns; complicated jargon and language that is difficult to understand; unlicensed sellers; sounds too good to be true; unsolicited offers; and pressure to buy RIGHT NOW.