Join us on our Telegram Channel @CryptoSlateNews
Bybit launches BTC Brawl trading competition
·

SEC charges ICO Rating for shilling crypto projects without disclosure

SEC charges ICO Rating for shilling crypto projects without disclosure

The SEC penalized Russia-based ICO Rating for failing to disclose it was being paid to shill cryptocurrency projects. The enforcement action comes as the Commission continues to crack down on firms that tout crypto securities without disclosures.

ICO Rating is one of several mostly Russian-run crypto rating agencies, behind ICOBench and ICOmarks. The firm advertises itself as an “independent” rating and research service on a mission to “help the market achieve the necessary standards of quality, transparency, and reliability.”

However, it seems ICO Rating failed to adhere to its own mission statement. The SEC found that the agency covertly accepted payments to shill cryptocurrency securities that were supposedly being evaluated ‘independently.’

ICO Rating violated the anti-touting provisions of the Securities Act of 1933 because it “failed to disclose that it was paid by certain issuers whose ICO offerings it rated,” said the Commission.

ICO Rating agreed to pay disgorgement and prejudgement interest of 107,000 and civil penalties of $162,000, without admitting or denying the SEC’s findings, for a total of $269,000.

“The securities laws require promoters, including both people and entities, to disclose compensation they receive for touting investments so that potential investors are aware they are viewing a paid promotional item,” said Melissa Hodgman, associate director of the Commission’s enforcement division.

This is certainly not the first (or last) time crypto-related businesses were found promoting coins without disclosure. In October 2018, BreakerMag found that half of crypto news outlets would, for a fee, publish an advertisement without disclosing they were being paid—including larger publications such as Bitcoinist and NewsBTC.

Celebrities have also been found to endorse crypto-based securities without disclosure. Floyd Mayweather and DJ Khaled were penalized by the SEC for accepting payments to shill crypto projects without informing people of receiving payment. John McAfee is notorious for similar behavior.

Hopefully, as the Securities Exchange Commission cleans up the crypto-sphere people can be more confident in the information they read. But, we wouldn’t count on it.

Posted In: , Altcoins, Regulation

The above advertisement is an affiliate link. CryptoSlate will earn a small commission if you sign up.

Like what you see? Get more SEC enforcement news in your inbox

Subscribe to CryptoSlate, our daily newsletter containing the top stories and analysis.

Sign up to stay informed
Mitchell Moos
Author

Mitchell Moos

Contributing Analyst @ CryptoSlate

Mitchell is a software enthusiast and entrepreneur. His first startup built algorithms for optimizing cryptocurrency mining. Prior to CryptoSlate, Mitchell was a project manager at a firm that built distributed software on Hyperledger. In his spare time he loves playing chess and hiking.

View author profile

Commitment to Transparency: The author of this article is invested and/or has an interest in one or more assets discussed in this post. CryptoSlate does not endorse any project or asset that may be mentioned or linked to in this article. Please take that into consideration when evaluating the content within this article.

Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.