The Securities and Exchange Commission (SEC) in the USA is looking to monitor and possibly persecute those involved in violations of "distributed ledger technology and initial coin offerings [ICOs]". The SEC will be establishing what it calls a "Cyber Unit" which will have the mandate of focusing on targeting cyber-related misconduct and the "establishment of a retail strategy task force that will implement initiatives that directly affect retail investors".

Earlier in 2017, the SEC issued findings from its investigative report into ICOs and it stated that, “U.S. federal securities law may apply to various activities, including distributed ledger technology, depending on the particular facts and circumstances, without regard to the form of the organization or technology used to effectuate a particular [cryptocurrency] offer or sale,”.

The Cyber Unit has apparently been in planning for months and it is announced at a time when there has been a marked increase in ICOs. It will focus on targeting cyber-related misconduct, such as:

  • Market manipulation schemes involving false information spread through electronic and social media.

  • Hacking to obtain material nonpublic information
    Violations involving distributed ledger technology and initial coin offerings.

  • Misconduct perpetrated using the dark web.

  • Intrusions into retail brokerage accounts.

  • Cyber-related threats to trading platforms and other critical market infrastructure.

Along with the Cyber Unit, the SEC announced the the Retail Strategy Task Force which will develop "proactive, targeted initiatives to identify misconduct impacting retail investors".

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