SEC to Focus on Crypto and ICO Fraud

SEC Office of Compliance Inspections and Examinations Announced 2018 Examination Priorities concerning Cryptocurrency and ICO Fraud
09 February 2018   165

Every year SEC Office of Compliance Inspections and Examinations publishes their examination priorities in order to improve compliance, prevent fraud and monitor risk. This year, inspectors will focus on crypto and ICO fraud.

The financial inspectors of the SEC announced examination priorities on February 7 of 2018. The inspectors will monitor the growth of cryptocurrencies and initial coin offerings (ICOs). Also, they will focus on matters involving critical market infrastructure, duties to retail investors, and developments in cryptocurrency, initial coin offerings, and secondary market trading.

Jay Clayton, SEC Chairman, appreciates OCIE’s dedication to maximizing the effectiveness of their resources with a keen eye toward asset verification, market infrastructure, and duties owed to retail investors.

According to the document, the cryptocurrency and ICO markets have grown rapidly and presented a number of risks for retail investors that is why the regulators will continue to monitor the sale of these products, and where the products are securities, examine the regulatory compliance.

Bank of America: Cryptocurrencies Are a Threat

Bank of America (BoA) has admitted to US regulators it can not pretend any longer that cryptocurrencies are not a threat
23 February 2018   74

On February 22, the report was filed with the US Securities and Exchange Commission (SEC). It listed a range of economic, geopolitical, and operational risks that the Charlotte, NC-based bank faces as it heads into the new fiscal year. Crypto adoption was on the list for the first time.

Bank of America (BoA), which recently banned purchasing of crypto with credit cards, stated that this and other similar policies could cost the bank clients.

Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies.

The second largest bank in the U.S. said that adoption of cryptocurrencies could require the bank to make “substantial expenditures” to update its existing services and remain competitive with upstart firms.

The widespread adoption of new technologies, including internet services, cryptocurrencies, and payment systems, could require substantial expenditures to modify or adapt our existing products and services.

According to the Bank of America, cryptocurrencies could limit the institution’s ability to comply with anti-money laundering regulations.

Eventually, this is one of the first public admissions that financial institutions are beginning to worry that mass cryptocurrency adoption could one day become a reality.