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ICO trading is susceptible to price manipulation



The SEC is continuing to build up its rhetoric about initial coin offerings (ICOs).



08.Nov.17 11:31 PM
By Daria Zaytseva
Photo Toinnov.com

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ICO trading is susceptible to price manipulation

Speaking to the Practicing Law Institute's Institute on Securities Regulation in New York, Chairman Jay Clayton called the cryptocurrency market opaque and vulnerable to manipulation. In his full comments, he continued to characterize tokens released for startup or open-source project fundraising as ripe for misconduct, mentioning them along with penny stocks and hidden fees on investment products.

Referring to the SEC's findings from the consideration of the DAO crisis, Clayton reiterated that the exchange of cryptocurrencies need to either be register or receive exemption. He added that "the Commission will continue to seek clarity for investors on how tokens are listed on these exchanges, as well as standards for listing; how tokens are valued and what protection measures exist to ensure market integrity and protect investors."

The SEC chairman described penny stocks and ICOs as "topics that have proven over time to be fertile ground for fraud on investors", although he acknowledged that further policy on this issue is needed.

Clayton, who took the lead in the SEC in May from acting chairman Michael Piwowar, said the commission would soon dramatically cut its short-term rulemaking agenda to issues that the agency has "a reasonable expectation of completion in the next year."




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