US SEC Fines Some Media Outlets For Illegal Crypto Offerings
GTV and Saraca media outlets are among some of the media outlets fined by the SEC for promoting unregistered securities and digital asset offerings. The SEC also claimed that these media outlets incentivized many people to invest in their stock and private digital asset offerings by asking them to promote the business opportunity on their social media handles.
Media Outlets To Pay About $500m As Fines To The SEC
SEC findings revealed that these media outlets collectively raised over $500m based on this social sharing alone. However, none of these media outlets had the license to run such offerings, and neither of them verified their users. SEC said any company, including media outlets, selling securities need to offer potential investors licensed disclosures as stipulated by appropriate security laws.
However, these media outlets didn’t have a license to make this offering. Thus, they have breached regulatory laws, and the commission has decided to take over and refund investors’ money. Even though none of the accused media outlets has agreed to or contradicts SEC’s claims, they have chosen to pay the $435m fine and $17m for prejudgment interest.
Then, these firms will still be mandated to pay $16m as civil fines. However, respondents to the SEC’s survey have dissociated themselves from any plan the SEC intends to execute to refund the investors. Also, the affected media outlets have agreed to place SEC’s notification on their websites for full public disclosure regarding their security offerings.
Crypto Platforms With Security Tokens Must Register With The SEC
SEC chief, Gary Gensler, has again called on crypto platforms with security tokens to register with the commission. He made these remarks ahead of his meeting with the country’s banking committee regarding oversight functions for the crypto space. Gensler reiterated the need for investor protection regarding digital asset investment.
He also said, “the current situation is akin to the period of “caveat emptor” which was the norm before creating securities’ policies. There must also be a regulated framework for the crypto space to rid it of the fraud and abuse that is currently common in the space.” The SEC chief further remarked that he had asked crypto projects to feel free and discuss with the commission.
Gensler also said, “any security tokens without any proof of exemption must register with us. We have identified several platforms with no securities but accept trading on security tokens.” On synergy with other similar agencies such as the treasury department and the federal reserve, Gensler revealed that the sec is working in collaboration with them, especially in protecting investors against crypto frauds.
Growing Regulatory Scrutiny
The SEC chief’s comments follow warning notices the commission recently sent to two crypto platforms (Coinbase and Uniswap), both of which he accused of selling securities without obtaining the proper license. Also, the SEC’s legal battle with Ripple labs has been ongoing for months now, and crypto enthusiasts are keen on the outcome of that lawsuit. SEC had also accused and sued ripple of selling its governance token as securities.
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