Tokens Continue to Take a Hit: is SEC Preparing to Target Crypto Projects?

The price of Bitcoin has dropped by 10 percent over the last 24 hours following a severe sell-off. Yet, several low market cap crypto and tokens have plunged by twice that amount, posting losses in the range of 20 percent.

ERC20 tokens launched on top of the Ethereum blockchain network have performed especially poorly against both Bitcoin and the US dollar over the past several days.

Waltonchain, Lisk, ICON, Ontology, Golem, VeChain, WanChain, and many other tokens backed by active developer and investor communities declined substantially in the last week. Even Basic Attention Token (BAT) and 0x (ZRX), which experienced strong short-term upward movements prior to the Coinbase listing, dropped by more than 36 percent.

Is the US Going After ICO Projects?

The listing of BAT and ZRX by Coinbase confirmed that the two tokens are not considered securities under existing regulations set forth by local financial authorities in the US. Coinbase was cautious in listing tokens on its platform because in an event wherein the tokens listed by the exchange are identified as securities, Coinbase could be targeted by the US Securities and Exchange Commission (SEC) for the distribution of unregistered securities.

It is possible, as government enforcement defense and securities litigation attorney at Kobre & Kim, Jake Chervinsky, said, the SEC is preparing to take down many cryptocurrency exchanges and initial coin offering (ICO) projects, with many pending cases in the hands of the commission.

“Most enforcement actions are kept confidential until they’re resolved to protect both the defendant (from bad press) & the government (from losses & inconsistencies). That’s why this case was settled before it was announced. On that point, remember all those subpoenas the SEC sent out earlier this year? Just because you haven’t heard about them recently doesn’t mean there aren’t dozens of investigations going on behind the scenes. Sooner or later, the floodgates will open,” Chervinsky said.

In an official announcement, the SEC disclosed that EtherDelta co-founder Zachary Coburn agreed to pay $300,000 in disgorgement plus $13,000 in prejudgment interest and a $75,000 penalty, showing that the case was settled between Coburn and the SEC prior to the release of the statement.

At the Investment Adviser Association conference in Washington, D.C., Stephanie Avakian, co-director of the SEC’s Enforcement Division, confirmed that dozens of investigations into ICOs are underway and expects to see more in the future.

“We are very active, and I would just expect to see more and more,” she said, according to Bloomberg.

ICO Projects on Thin Ice

In the upcoming months, the cryptocurrency space is expected to see several pending cases against cryptocurrency exchanges and ICOs brought up by the SEC. The regulatory uncertainty in the ICO market surrounding tokens could lead to a decline in confidence from investors towards small market cap cryptocurrencies.

EtherDelta co-founder Zachary Coburn and the exchange were charged with the distribution of unregistered securities, which suggests that the SEC has cooperated with Coburn to understand the nature of several, if not dozens, of tokens considered securities under US regulations.

The drop in confidence from investors and the market could lead to a bleed out for tokens until the SEC provides a clear guideline to provide clarity in the space.

Author:  Joseph Young
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Excellent Projects Being Built On NEO (NEO) Platform

NEO’s popularity and user base is expanding rapidly. So too are the projects on NEO, many of which have the potential to grow exponentially. Here are three excellent projects that our experts are keeping a close eye on.



Effect.AI plans to build a mechanical turk. Based on the historical chess playing wooden turk (a wooden machine designed to play and beat people at chess, which was really operated by a hidden man), this project is completely driven by ethics and ideals. It operates by empowering people in developing nations by paying them $10 per hour for jobs. These simple tasks can be anything from filling out forms to crunching numbers. The end results are filtered into the AI machinery and help to act as a humanitarian mission.

Bridge Protocol

This is a specific ID management system which is designed to efficiently streamline and simplify ICO whitelisting processes. Currently, law firms charge around $250,000 for a complete KYC whitelist process, and Bridge Protocol is aiming to significantly reduce this.

The company is based in the US and is dedicated to being 100% compliant with all US laws and legislation to ensure that the company has secure and stable foundations for the future. They have a billion tokens at the moment, which are trading at under $1 each, so is well worth investing in.


This is a NEO based DEX, which has a very aggressive team behind it, who are trying to push the project as fast and far as possible. Switcheo was the first NEO base to market and it prides itself on promoting a user-friendly experience, which will help them to grow. Switcheo is the first multichain decentralised exchange for NEP-5 token trades built on the NEO platform.

While these are not all of the hidden gems on NEO, they are some of the best that are up and coming. The potential for these new projects is huge, and may give you a huge return on investment.

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Author: Adrian Barkley
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