The U.S. Securities and Exchange Commission (SEC) has announced the formation of a new cross-border task force aimed at preventing financial fraud occurring across international borders.
Goals of the New SEC Task Force
The SEC's cross-border task force will focus on fraud schemes related to cryptocurrencies, particularly pump-and-dump schemes. These schemes pose significant risks to investors globally, as fraudsters can hide behind international borders, utilizing jurisdictions with weaker investor protections.
Key Statements from SEC Chairman
SEC Chairman Paul S. Atkins emphasized the importance of this task force on social media, stating that the U.S. welcomes international businesses but will not allow fraud to slip through loopholes. The SEC also indicated that attention would be given to auditors and underwriters who assist foreign companies in accessing U.S. markets, facing repercussions if they facilitate fraudulent activities.
Rise of Pump-and-Dump Schemes in Crypto
Cryptocurrency markets have witnessed a rise in pump-and-dump schemes where fraudsters manipulate token prices usually low in liquidity by pushing hype. Examples such as the fake CR7 token and the fall of the LIBRA token highlight how easily retail investors can be exploited in fast-moving crypto markets.
The establishment of the SEC's cross-border task force represents a critical step in addressing international financial fraud, especially in the cryptocurrency sector, which is becoming increasingly susceptible to manipulation.
