24 Jun 2020 Samantha McLauren
SEC Receives Limits On Crypto Financial Crime Penalties
The US Securities and Exchange Commission (SEC) can no longer impose penalties that are greater than the generated financial profits, especially on crimes that will impact the crypto and blockchain scam schemes. However, the Supreme Court decision is in regards to financial crimes as a whole, encompassing other aspects apart from the crypto crimes as well.
The Supreme Court ruling comes as a result of a legal battle between the SEC and Liv. In addition, the SEC was ordered their penalties to be aimed at the acquired benefits, baring the regulator from collecting fines as punitive damages. The ruling went even further, forcing the SEC to apply a five-year statute limitation to any “civil fine, forfeiture, or penalty.”
The suit case, which led to the Supreme Court taking actions against the U.S. financial watchdog has nothing to do with cryptocurrencies. Plaintiffs gathered as much as $27 million for building a cancer-treatment center, which later turned out to be a fraud scheme.
The plaintiffs were accused of illicitly gathering funds from foreign investors, and the SEC pressed civil charges, as well as disgorgement, totaling the full amount of raised funds along with some other reliefs.
Meanwhile, the SEC steps up its regulatory role in the crypto sector, as in Q4 of 2019 the financial watchdog put a hefty $250,000 fine on Blockchain of Things Inc. (BCOT) for conducting an unregistered ICO token sale. Apart from the quarter-million-dollar fine, BCOT had to return all funds raised from the ICO. According to ICO data, BCOT managed to raise nearly $13 million amid the peak of the ICO boom.
Also, the two-year saga between the SEC and messenger giant Telegram resulted in Telegram ditching its ICO plans. As Cryptobrowser reported, Telegram shut down its $1,7 billion ICO after a set of deadline shifts and regulatory pressure. The regulatory havoc, concerning the crypto sector, took yet another victim in the face of Facebook’s Libra project. Initially, Facebook and their associates planned to issue a stablecoin, backed by a basket of fiat currencies. However, Libra’s current plans are to issue several location-based stablecoins, to ensure regulatory compliance across all jurisdictions.ICO news Cryptocurrency Regulations Cryptocurrency Scam News SEC Crypto Market ICO finances scam SEC Security and Exchange Commission ICO regulation us economy Security Regulation Blockchain News Government USA US Financial institution Regulations Telegram Facebook Libra