SEC’s Division of Enforcement Co-Director Sheds Light on the Division’s Impact in 2018

On Thursday, 20th Sept. 2018, Co-Director Stephanie Avakian of the Division of Enforcement of the U.S Securities and Exchange Commission (SEC) took the time to dish a cold but true speech about the ways to measure the impact or success of a civil law enforcement program like the SEC’s Division of Enforcement.

She urged her audience and the general public to refrain from using figures or numbers as an analytical tool for measuring the impact of the program as these statistics only give a fraction of the accomplishment and not the full success story.

It is almost the end of the fiscal year 2018, which means lots of analyses will be popping out from every nook and cranny, hence the need to reflect on the year so far at the Division.

Co-Director Avakian went further to list a few examples of the fraudulent cases the Division closed in this fiscal year and the principles that have guided the Division in actualizing this success.

Without much ado, she leaped into the two exemplary success stories of the 2018 fiscal year – the first being the Division’s approach in dealing with misconducts in the Initial Coin Offering (ICO) and digital market space and the other, the Division’s Share Class Selection Disclosure Initiative.

Concerning ICOs and digital assets, Ms. Avakian started out by giving the growth statistics of cryptocurrency and ICO markets. A market that has experienced a phenomenal spike from $4 billion it was in 2017 to over $16.7 billion in 2018.

As much as this technology is a welcome development, we shouldn’t fail to recognize the risk associated with it.

She went further to disclose some of the strategies the Division has put in place to minimize the risk level that crypto-investors get themselves into.

The Division appreciates this technology just like any other innovators or crypto-enthusiasts but will not turn a blind eye to the risk factors that come with it.

Therefore, the Division has adopted a few strategies to ensure that the federal security laws apply to the buying and selling of offerings and cryptocurrencies.

The first line of action was the creation of a cyber unit in the division in the 2017 fiscal year and then, the issuance of the DAO Report which was aimed at overseeing the activities of the crypto-market.

Also, the Commission has taken enforcement action in cases where the technology is being used as a means to defraud crypto-investors. The Commission has also seen to it that companies/investments, whether registered or not, that operate questionable schemes are issued orders to suspend trading.

Away from that, she shed some light on how ICO registration cases that do not involve fraud are being handled by the Commission and how crypto-related cases involving individuals, not issuers in this case, are being treated as well.

Personal Thought: I guess it is safe to say that the SEC is utilizing every means within their reach to ensure a safe and secured crypto-market and we the crypto-enthusiasts acknowledge their tireless efforts and hope they do not deviate from what the Commission stands for. With such a trend, we are sure of a bright future in the crypto world.

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