Illegal ICOs Paid a Quarter of SEC’s $4.68 Billion Crackdown

Illegal ICOs Paid a Quarter of SEC’s $4.68 Billion Crackdown

November 12, 2020

The United States Securities and Exchange Commission (SEC) has published its annual report for FY2020, revealing that its enforcement division collected over $4.68 billion in disgorgement and penalties. A quarter of that amount came from the bust of Telegram’s Gram token sale.

The money collected as disgorgement and penalties by the regulator hit a record last year. In the previous year, the SEC collected $4.3 billion, meaning there was a roughly 8 percent increase in FY2020.

The SEC took action against a total of 715 cases that ranges violators from securities offerings, insider trading, and market manipulation. Out of the total collected proceeds, the regulator has already distributed $600 million among the victims.

SEC vs ICOs

Though the market watchdog penalized many financial companies for regulatory violations, the amount that came in from illegal ICOs become significant. The enforcement body collected $1.26 in total from eight illegal ICOs.

Telegram alone was forced to return $1.2 billion to Gram token investors and pay an additional $18.5 million in fine. The encrypted messaging platform alone plaid 26 percent of the total amount collected by the commission.

Telegram raised around $1.7 billion from selling Gram tokens to accredited and professional investors for launching its ambitious blockchain network. But the project came under the radar of the SEC, resulting in a court battle that forced Telegram to shelve its plans.

Another high profile ICO took down by the SEC last September was kik’s. The Canadian company was fined $5 million for selling unregistered securities to the US-based investors.

The other six ICOs in the list include Bitclave, Shopin, NAC Foundation, Unikrn, Boon Tech, and Bitcoiin2Gen that together contributed around $40 million to the SEC seizures.

Additionally, the regulator detailed that its whistleblower program hit a record in FY2020, as 39 individuals received around $175 million.

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