The United States Securities and Exchange Commission announced via a press release, that ICO Rating, a Russian analytics firm, has agreed to settle with the SEC after being charged for its failure to disclose payments it received from issuers for positive reviews and publicity. The settlement is tagged at $268,998.
According to the SEC’s press release, ICO Rating made certain reports and ratings for a few digital assets considered to be securities. The firm then published said reports on its website and also on its social media pages. The announcement then reveals that the firm purported to only help improve on the cryptocurrency market with independent research, in areas like standards of quality, transparency and also with reliability but “failed to disclose that it was paid by certain issuers whose ICO offerings it rated.”
The Associate Director of the SEC’s Enforcement Division, Melissa Hodgman, has said that according to requirements, all payments received, even for publicity, must be disclosed.
“The securities laws require promoters, including both people and entities, to disclose compensation they receive for touting investments so that potential investors are aware they are viewing a paid promotional item. This requirement applies regardless of whether the securities being touted are issued using traditional certificates or on the blockchain.”
The press release then states that ICO Rating ran afoul of Section 17(b) of the Securities Act of 1933. Therefore, the firm will be paying a penalty of $162,000 and an interest of $106,998. ICO Rating has promised to refrain from any further violations but did not admit or deny the SEC’s charges.
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