ICO Rating Agrees to SEC Fine

August 22, 2019 / by Crypto.IQ

Russian analytical agency ICO Rating has agreed to pay a heavy fine for its alleged violation of anti-touting provisions, the US SEC said in a statement released on Tuesday.

The United States Securities and Exchange Commission (SEC) accused the Russian rating firm of failing to reveal that it collected payments to publicize digital asset offerings of certain issuers it had rated. ICO Rating had not denied or admitted the offense allegedly committed between December 2017 and July 2018. The company had, however, agreed to pay a fine of $268,998 and to stop receiving payments for reviews henceforth.

According to a statement on the SEC’s website, ICO ratings, a site that averages 110,000 views per month, publicized ratings of ICO tokens that the US regulator  classifies as securities on its platform and on several social media channels. And even though the rating website bragged that it is committed to “independent analytical research,” it failed to reveal that it had received payments from certain “issuers whose ICO offerings it rated.”

That is totally unacceptable in the world of selling securities­, let alone unlicensed ones, where promoters need to let the public know when their opinions are biased and not genuine, as demanded by the laws. In the past, similar charges have been levied against various celebrities, including rapper DJ Khaled and professional boxer Floyd Mayweather, for promoting the infamous Centra initial coin offering (ICO).

Melissa Hodgman, a senior official of the SEC’s Enforcement Division, said in today’s publication, “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.”

She continued, “This requirement applies regardless of whether the securities being touted are issued using traditional certificates or on the blockchain.”

Paid ratings are not a new thing in the sleazy underworld of ICO token investment and the associated cottage industry, which was built to make it a mainstream thing. Just recently, it was  reported that another popular review website, ICObench was offering jump-up reviews to issuers at a discount.