Morning Markets: The SEC and FBI show up to the aftermath of the ICO boom.
Late this week, two pieces of news involving bad actors in the crypto space came to light that are worth discussing.
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First, the SEC settled with, and I kid you not, Floyd Mayweather and DJ Khaled for “unlawfully touting coin offerings.” In other words, two celebrities just got dinged for ICO-related shenanigans. And, the FBI arrested Jared Rice, who raised $4 million in what appears to be an ICO based on fictitious premises.
My first question is why go after these three individuals first? After all, if celebrities are going to get in trouble for repping various token sales, there are more to go through. And, Mr. Rice’s AriseCoin ICO never made my radar; surely there are bigger targets waiting in the wings.
Regardless, the punishments range from financial to dozens of years in prison. In the case of the boxer and the DJ:
And, according to CoinDesk, the ICO founder in question is even more trouble, having been “charged with three counts of securities fraud and three counts of wire fraud.” He could get over 100 years in prison. That’s life.
All this is to underscore that after the Great ICO Boom (now somewhat over), there’s a lot of loose ends left untied. I would expect to see even more of this sort of legal action in the coming months.
Which isn’t bullish for crypto as a whole, and must be especially tough news for the crypto space and its various constituents who are under steep price pressure in recent weeks. But, like with any boom times, rising levels of fraud are a sign of the top. And here we’re seeing the fraud shake out after the peak.
Top Image Credit: Li-Anne Dias.
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