US Regulator Issues Cease and Desist Order to Russian ICO Mimicking Liechtenstein Bank

Securities Commissioner Karen Tyler of North Dakota, U.S., has issued a cease and desist order against a Russian Initial Coin Offering (ICO) that posed as Liechtenstein Union Bank, according to a Monday, Nov. 19 press release. The state Securities Department’s ICO Task Force conducted an investigation and found out that the website of the fraudulent ICO mimicked Union Bank Payment Coin (UBPC) — an existing token launched by Union Bank in Liechtenstein back in August. As per the regulator, the project’s website claimed to become the “world’s first security token…

ICO Performance in Q3 2018 Saw ‘Overall Disappointment,’ Study Shows

Initial Coin Offering (ICO) performance was in part characterized by “overall disappointment” in the third quarter of 2018, according to a study from ICO analysis firm ICORating published Nov. 15. As the report states, Q3 2018 saw 597 ICOs raise over $1.8 billion, a notably lower value than the over $8.3 billion reportedly raised in the previous quarter. A similar decline in investment has been reported in traditional Venture Capital (VC) funding for blockchain projects. In the report, the decline in funding is accompanied by a median return on investment…

ICO Issuers Settle Registration Charges With SEC

The U.S. Securities and Exchange Commission (SEC) has agreed to settle charges with two startups that sold tokens through Initial Coin Offerings (ICOs) in 2017. The companies were charged by the SEC for running their ICOs after the regulator clearly defined such offerings as unlicensed securities in its DAO Report of Investigation. The startups indicted by the SEC are Boston-based Airfox, which sold $15 million worth of tokens, and Paragon Coin, which raised $12 million selling tokens.  “We have made it clear that companies that issue securities through ICOs are…

Guilty Plea Moves First US ICO Fraud Case to Final Stages, Sentencing Set for April

The suspect at the center of the U.S.’ first Initial Coin Offering (ICO) fraud case has pleaded guilty in court, in part settling a case seen as a bellwether for the country’s securities laws, Bloomberg reported Nov. 15. Maksim Zaslavskiy, who faces a sentence of up to 37 months after lying to investors who put funds into two ICOs last year, confirmed he had lied about aspects of his operations. The court case involves REcoin and Diamond Reserve Coin, which had claimed to be backed by real estate and diamonds…

France Accounts for Minor Part of Global ICO Market, While US Leads the Industry

The Initial Coin Offering (ICOs) industry in France represents a minor part of the global ICO market, according to a report on ICOs released by French financial markets regulator AMF (l’Autorité des marchés financiers) today, Nov. 14. According to the recent study, the global ICO market has accounted for 19.4 billion euros ($21.8 billion) since 2014. Having experienced rapid growth since 2016, most of the market share has mainly been concentrated in 2017 and during the first three quarters of 2018, with 13.4 billion euros ($15 billion) raised within this…

Fraudulent South Korean Exchange Pure Bit Nabs $2.8M in ICO Exit Scam

A South Korean ICO has defrauded its private sale investors out of roughly 13,500 ETH ($2.8 million) before disappearing from the internet entirely. Pure Bit, which has already pulled the plug on its website, has apparently conducted a fairly routine exit scam for its Pure Coin token sale. The cryptocurrency was pitched as an exchange token for Pure Bit, an exchange that was supposed to launch by the end of the month. The Coin  promised to give investors shares of the exchange’s trading revenue as well as discounted fees for trading,…

Thailand to Legitimize First ICO ‘Portal’ via New Regulation, Says SEC Head

Thailand’s securities regulator will clear “at least one” Initial Coin Offering (ICO) “portal” to operate legally in November, local daily news outlet Bangkok Post reported Nov. 8. Speaking to the publication, Rapee Sucharitakul, secretary general of the Thai Securities and Exchange Commission (SEC) said that ICOs themselves could also start seeing official approval to serve Thai markets as soon as December. “At least one ICO portal will be certified in November, then we can approve each ICO offering, which might start in December,” he said. The confirmation marks the closing…

The Incoming Wave of ICO Regulation (Yes, It’s Coming)

Alex Sunnarborg is a Founder of Tetras Capital. Previously, he was a research analyst at CoinDesk and a founder of the crypto investing app Lawnmower. As you may know, securities classification analysis in the U.S. today primarily revolves around the Securities Act of 1933 and the SEC v. W.J. Howey Co. Supreme Court case of 1946. The Securities Act of 1933 was established to require issuers to disclose certain pieces of information to potential investors prior to any public securities offering. This law was enacted to reduce misrepresentation by issuers and to help…

How One Project is Fighting Fake ICO Reviews Using AI and Blockchain

On October 24, Revain, a service for collecting customer reviews, released a full-scale working 1.0 version of its Ethereum-based platform. As the project team reported to Cointelegraph, the 1.0 version is completely blockchain-based, containing a verification system and artificial intelligence (AI), among many of its other new features. “Users can see all of the reviews written in the blockchain on a special page,” reads the official press release. The Revain platform was launched in order to change the process of collecting reviews from customers, by means of blockchain technology. The…

Taiwan Will Issue Draft ICO Rules by June 2019, Regulator Says

Taiwan plans to release draft Initial Coin Offering (ICO) regulation by June 2019, local English-language daily news outlet Taipei Times reported Tuesday, Oct. 23. The publication quoted plans from Wellington Koo, chairman of Taiwanese finance regulator — the Financial Supervisory Commission (FSC) — who was speaking at a meeting of the Legislative Yuan Finance Committee. “The more we regulate, the more this new economic behavior wanes,” he told members of the meeting on Oct. 22. ICOs have created tension throughout international jurisdictions keen on avoiding consumer exposure to fraud. Locally,…