According to a petition filed by some of the ICO investors, SEC should remediate in case ICO gone wrong. In many of the cases, it has been found that the pitch of the ICO companies is not true entirely. In such a case, there are multiple violations by the company launching the ICO. According to a petition filed with the agency last month, investors have requested it to remediate in such cases.
The petition was filed by Liquid M capital. The petition clearly states that SEC should take notice of the illegal ICO offerings which are being launched by the companies. Many of the companies are not sticking to their sales pitch. This is the reason why the petition author thinks that SEC should remediate in such cases in order to protect the investors.
In case of illegal offerings, the investors are at the risk of losing their entire corpus. When SEC intervenes and protects the interests of the investors, at least some of the money can be retrieved. Moreover, the companies can be made to honor the commitments or the sales which they have disclosed to the investors at the time of ICO. This would surely have the investors save their corpus.
The author of the petition has had the previous history of requesting SEC to draft cryptocurrency guidelines. Thus, it does not come as surprise. According to an older petition by the same author, the author requested the SEC to create a proper regulatory framework in order to supervise the ICOs.
The truth is that, with so many different companies launching the ICOs, it is necessary to have a watchdog. SEC can play this role as it regulates the IPO market as well. The IPO market is similar to the ICO market. This is the reason why investors are looking up to the SEC to protect their interests. Only when the interest of the investors is protected, newer investors would come into the ICO market.
It remains to be seen whether SEC actually takes the suggestions of the petitioner into account. If indeed it does, the ICO market would soon find a regulator. This would make ICO investments much safer for all the stakeholders involved. This would also give an enhanced credibility to the companies launching ICOs. The companies would be able to get the ICO s approved in advance by the regulator which would make it easier for the investors looking to invest in the ICOs. This is the right step for the regulator to take.