SEC Considers All ICOs as Securities

According to the head of SEC, ICO should be regulated like the securities offering
07 February 2018   570

The head of the US Securities and Exchange Commission (SEC), Jay Clayton, said that all the ICO held at the time of the hearings in the Senate Committee on Banking Supervision placed shares on the market. Thus, the head of the agency clearly defined the government's position on the status of the tokens issued during the ICO, reports CoinDesk.

I believe every ICO I’ve seen is a security. [At the same time] no project was registered with the SEC.

Jay Clayton

Head, SEC

Massachusetts senator Elizabeth Warren, who takes a tough stance towards the ICO, asked the officer if they violated the securities legislation in this way.

"Yes," he replied.

Clayton also said that the SEC can not determine the exact amount of aggregate investments by US citizens in ICO projects in 2017, but he is convinced that it is large enough for the agency to pay attention.

In his opinion, the organizers of the ICOs know that they must comply with US legislation and SEC regulations, but they ignore it, since regulators have not established a clear framework.

I want to go back to separating ICOs and cryptocurrencies. ICOs that are securities offerings, we should regulate them like we regulate securities offerings. End of story.

Jay Clayton

Head, SEC

Jay Clayton also noted at the Senate hearings that blockchain technology can be very useful for verifying data and creating distributed storage and record keeping systems. 

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Centra Tech Inc. Co-Founder accused With Fraud by SEC

The US Securities and Exchange Commission (SEC) has charged Centra Tech Inc. co-founder, Raymond Trapani with ICO fraud  
25 April 2018   56

The charge came as the result of the SEC’s investigations into Centra’s controversial $32 million USD initial coin offering (ICO). Mr. Trapani is the third and final Centra co-founder to be accused for taking part in the ICO.

Raymond Trapani, a co-founder of Centra Tech Inc., has been charged by the SEC for his participation in “a fraudulent scheme connected with Centra’s 2017 ICO.” In 2017 Centra made headlines after enlisting celebrity approval from Floyd Mayweather and DJ Khaled. Two other firm`s co-founders, Sohrab “Sam” Sharma and Robert Farkas, were charged by officials earlier this month for their engagement  in the distribution of “CTR Tokens” to investors.

A changed variant of the SEC’s complaint demands that Trapani was the “mastermind of Centra’s fraudulent ICO,” with an SEC press release alleging that “Centra [was] marketed with claims about nonexistent business relationships with major credit card companies, fictional executive bios, and misrepresentations about the viability of the company’s core financial services products.” The SEC accuses Mr. Trapani and Mr. Sharma of “manipulat[ing] trading in the CTR Tokens to generate interest in the company and prop up the price of the tokens.”

We allege that the Centra co-founders went to great lengths to create the false impression that they had developed a viable, cutting-edge technology. 
Robert Cohen, Chief, SEC Enforcement Division’s Cyber Unit


The SEC has disclosed a text mail sent to Mr. Farkas and Mr. Trapani from Mr Sharma in what Mr. Sharma said to his colleagues “[w]e gotta get that s[***] removed everywhere and blame freelancers lol.” Mr. Trapani also demanded that Mr. Sharma “cook [him] up” a fraudulent document whilst the company was seeking to get CTR tokens listed on exchanges under misleading pretexts. Mr. Sharma replied to the request with “Don’t text me that s[***] lol. Delete.”

At the same time, the U.S. Attorney’s Office for the Southern District of New York has also looked for criminal accusations against Trapani. The SEC has revealed that text messages  jointly used between Centra’s co-founders discovered the scam purposes of the defendants.