The annual report of the SEC’s Division of Enforcement has detailed the actions taken against initial coin offerings during the preceding financial year. Also, a report published by One Alpha estimates that Israeli ICOs have raised more than $600 million during 2018, and 25 investors have filed a lawsuit accusing rapper T.I. and his business partner for allegedly operating a “pump and dump” through their Flik ICO.
SEC Details Action Taken Against ICOs During Financial Year
The U.S. Securities and Exchange Commission (SEC) Division of Enforcement has published its annual report, which includes a summary of the action taking by the regulator against ICOs over the course of the last financial year.
The SEC states that “Given the explosion of ICOs over the last year,” it has sought to pursue “cases that deliver broad messages and have market impact beyond their own four corners.” In 2018, the SEC “brought 20 standalone cases, including those cases involving ICOs and digital assets.”
The SEC notes that while many of said cases “have involved allegations of fraud,” the Division of Enforcement also has also taken action “to ensure compliance with the registration requirements of the federal securities laws.” In the past year, the SEC has opened “dozens” of investigations involving ICOs and cryptocurrency, many of which are ongoing as of this writing.
The report adds that the joint statement published by the SEC Division of Enforcement and the SEC Office of Compliance Inspections and Examinations urging caution with regard to the celebrity promotion of ICOs “brought an almost immediate end to such promotions.”
Israeli ICOs Raise $600 Million During 2018
A report conducted by cryptocurrency research firm One Alpha has found that cryptocurrency startups based in Israel have generated more than $600 million through ICOs during the first three quarters of 2018. Israeli ICOs also raised $586 million throughout the entirety of 2017 from less than 20 offerings.
One Alpha’s research was informed by surveying 140 active companies from Israel’s distributed ledger technology section. The report estimates that said companies have generated a combined $1.3 billion in investments since 2017, of which “More than … 88% of the funds are ICO-related.”
The chief executive officer of One Alpha, Yaniv Feldman, highlighted that “Israelis are less than 0.1 percent of [the] global population while making 3 to 5 percent of [the] global ICO fundraising” total.
Two Dozen Investors Sue Rapper T.I. Over Flik ICO “Pump and Dump”
The Blast and TMZ claim to have accessed documents evidencing that rapper T.I. and his business partner are facing a lawsuit accusing them of operating a pump and dump scheme through their ICO. Reports state that the lawsuit has been launched by 25 individuals who collectively invested more than $1.3 million in exchange for “now worthless securities called Flik Tokens.”
The plaintiffs assert that T.I. and Ryan Felton used “social media, celebrity endorsements, and well-known industry experts to create the false impression that Flik Tokens were a valuable liquid investment.” The investors also allege that Felton “created fake online posts on behalf of Mark Cuban in order to manipulate the value of Flik Tokens,” and that the pair fraudulently announced that Kevin Hart was going to become the face of the company.
The group accuses T.I. and Felton of then dumping on the markets, and are seeking $5 million in damages for securities fraud.
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