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SEC Launches Cyber Unit to Crack Down on ICO Fraud

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By Anna Baydakova

U.S. Securities and Exchange Commission (SEC) chairman Jay Clayton announced a new cyber unit dedicated to fighting fraud conducted through initial coin offerings on Thursday.

Speaking to the SEC Advisory Committee at the Georgia State University College of Law, he said that the agency formed a special unit to watch, among other concerns,  “violations involving distributed ledger technology and initial coin offerings.” Other areas of focus will include market manipulation schemes, the spread of fake information, illicit activities in the dark web and the hacking of online brokerage accounts.

He added:

“The unit also focuses on violations involving distributed ledger technology and initial coin offerings, ensuring that we provide the oversight of this emerging market that investors have come to expect from the SEC.”

Clayton also referenced the SEC’s educational efforts, citing the launch of a bogus ICO website. HoweyCoins.com was made to teach investors the different signs of a scam. The chairman noted that the site cost SEC “less than $20,” explaining that “while fraud is very costly, it can be cheap to engineer.”

Clayton also referenced the SEC’s appointing of Valerie Szczepanik as its first Senior Advisor for Digital Assets and Innovation.

Jay Clayton image via CoinDesk archives

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