The head of the US Securities and Exchange Commission's cyber unit Robert Cohen warns of severe sanctions if regulation ignored.
Robert Cohen, the head of the US Securities and Exchange Commission’s cyber unit, warned the agency may seek more severe sanctions against issuers of initial coin offerings (ICOs) if they continue to flout securities regulations.
In a keynote address at the annual Securities Enforcement Forum West on Thursday, Mr. Cohen warned ICOs the agency had already put market participants on notice with last summer’s “DAO Report.” Despite that report, numerous speeches by SEC Chairman Jay Clayton and the Munchee $15 million token sale, no penalty has resulted. Aside from Munchee, the SEC has not yet brought another case purely over a registration violation. Mr. Cohen said, “If the conduct continues, despite all that, I think you will continue to see cases and probably the remedies will go up.” Mr. Cohen said the agency still has “a number of investigations ongoing” over ICOs and also “purely registration issues.”
Investigating digital assets has been one of the biggest areas of focus of the new cyber unit, which was created last September as part of the SEC enforcement division. Mr. Cohen noted, “The ICO cases and digital asset fraud cases are keeping us very busy,” he said. The creation of the cyber unit reflects the priority the SEC places on digital assets as well as cybersecurity issues, Mr. Cohen explained. The unit has some 30 people drawn from a pool of existing SEC staff at SEC offices in Washington, New York, Chicago, San Francisco, and Philadelphia.