Outgoing United States Securities and Exchange Commision chairman Jay Clayton’s tenure saw the institution secure 56 enforcement actions against crypto and blockchain firms as well ICOs.
Earlier this week news of Clayton’s departure from the SEC was confirmed, with the outgoing chairman set to leave his post in early 2021, some four years after he became chairman of the regulatory body in May of 2017.
Clayton has had an interesting history and attitude towards the cryptocurrency space, as Bitcoin surged in interest and the emergence of initial coin offerings quickly attracted millions of dollars in investments.
A major hurdle to overcome was developing effective regulatory parameters to the burgeoning cryptocurrency markets and various projects and their fundraising initiatives. The SEC warns any crypto and blockchain firms to be aware of the parameters that would make ICOs and tokens launches classed as security offerings, as set out in its Framework for “Investment Contract” Analysis of Digital Assets published April 2019.
56 firms served enforcement actions
On page three of a 23 page report that outlined the ‘Selected SEC Accomplishments’ during Clayton’s time at the helm from May 2017 to November 2020, the institution’s actions against ‘cyber-related misconduct’ is outlined.
In September 2017 the SEC set up the Division of Enforcement’s Cyber Unit which was tasked with investigating violations that involved the use of digital assets and cryptocurrencies, ‘cyber related trading violations like hacks aimed at obtaining confidential information, as well as cybersecurity disclosures and procedures at public companies and financial institutions’.
During this period the SEC brought 56 cases involving ‘ICOs, blockchain or distributed ledger technology, and/or digital assets’ from July 2017 onwards.
“Among others, cases involved efforts to defraud investors through the use of digital asset securities as well as violations of the registration provisions of the federal securities laws in the offer and sale of digital asset securities.”
The report also indicated that the SEC was able to stop 18 suspected fraud cases which involved either blockchain technology or digital assets.