Just When You Thought It Was Safe To Invest In Crypto

Just when you thought investing in cryptocurrencies was safe, the Securities and Exchange Commission announced it was launching an investigation into fraudulent ICOs.

The SEC's announcement comes after a broad crackdown on cryptocurrency fraud by federal and state regulators. Last week, Massachusetts Attorney General Maura Healy announced that she would sue four companies for conducting fraudulent initial coin offerings (ICOs) to finance fake businesses. The cities of Chicago and San Francisco have also filed lawsuits against the companies for alleged misconduct.

In contrast, the SEC has remained relatively silent on ICO investigations, despite warnings from mainstream financial institutions that investors could lose money. The agency has confirmed that it is considering “active enforcement actions” related to digital tokens,

But has not even acknowledged that it has launched an investigation into ICOs. In a recent interview with Bloomberg News, SEC Chairman Jay Clayton explained why he doesn't publicly say whether he's investigating an ICO: