The rating provider published issuer-paid assessment listing to users for months, which attracted an SEC fine for defrauding investors.
What was the case?
ICOrating.com, a platform for providing rating and reviews of initial coin offerings, was recently fined by the Securities and Exchange Commission of the US for defrauding investors. The platform published listings that were paid for by the ICO issuers. The news was provided to users on the pretense of unpaid and unbiased coverage. The SEC demands a fine of $268,998 to settle charges with the Russian website. The website operators consented to the payment without accepting or denying the regulator’s allegations.
The fine is more than double of what the website earned in presentation fees between December 2017 and July 2018, amounting to $100,572. The ratings made by the website were paid advertisements, but it is unclear if the token issuers added anything in the content that would portray the same. The SEC said, “ICO Rating charged entities a fee to rate, and produce and publish research reports regarding ICO projects on the www.icorating.com website, and to publicize the reports and ratings via social media channels.”
Anti-touting rule violations
According to the securities regulators, biased promotions may mislead the investors. The ICO promoters should disclose all payments they received to the regulators to avoid violating the federal securities laws. If they don’t, they could be booked under the anti-touting laws which mandate any entity to publicly disclose monetary payments it received from any issuer or dealer. The SEC may also find ICOratings.com in violation of anti-fraud laws as it participated in the sale of unregistered securities in the US. Charges may also include working as unregistered brokers of such securities.
Associate Director of the Enforcement Division of the SEC, Melissa Hodgman explained that promoters must disclose compensation they received for promoting investments under the nation’s securities laws. This helps the potential investors in understanding when they are receiving unbiased coverage and when they are viewing a paid advertisement. She also noted that the requirements would be applicable to any and all securities, whether they are issued using a traditional certificate or using a blockchain.
The SEC is cracking down on all unregistered companies that are touting cryptocurrency-related projects in the US without registering as brokers. Though the regular hasn’t taken a firm and formal stance on digital currencies yet, its latest round of crackdowns suggests that ICOs will be considered securities for regulatory purposes unless a new guideline arrives.
Trusted & Regulated Stock & CFD Brokers
What we like
- 0% Fees on Stocks
- 5000+ Stocks, ETFs and other Markets
- Accepts Paypal Deposits
Min Deposit
$200
Charge per Trade
Zero Commission on real stocks
64 traders signed up today
Visit Now67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Available Assets
- Total Number of Stocks & Shares5000+
- US Stocks
- German Stocks
- UK Stocks
- European
- ETF Stocks
- IPO
- Funds
- Bonds
- Options
- Futures
- CFDs
- Crypto
Charge per Trade
- FTSE 100 Zero Commission
- NASDAQ Zero Commission
- DAX Zero Commission
- Facebook Zero Commission
- Alphabet Zero Commission
- Tesla Zero Commission
- Apple Zero Commission
- Microsoft Zero Commission
Deposit Method
- Wire Transfer
- Credit Cards
- Bank Account
- Paypall
- Skrill
- Neteller
What we like
- Sign up today and get $5 free
- Fractals Available
- Paypal Available
Min Deposit
$0
Charge per Trade
$1 to $9 PCM
Visit Now
Investing in financial markets carries risk, you have the potential to lose your total investment.
Available Assets
- Total Number of Shares999
- US Stocks
- German Stocks
- UK Stocks
- European Stocks
- EFTs
- IPOs
- Funds
- Bonds
- Options
- Futures
- CFDs
- Crypto
Charge per Trade
- FTSE 100 $1 - $9 per month
- NASDAQ $1 - $9 per month
- DAX $1 - $9 per month
- Facebook $1 - $9 per month
- Alphabet $1 - $9 per month
- Telsa $1 - $9 per month
- Apple $1 - $9 per month
- Microsoft $1 - $9 per month
Deposit Method
- Wire Transfer
- Credit Cards
- Bank Account
Share
