Ethereum Price Remains in a Holding Pattern as SEC Shuts Down More than a Dozen ICOs

Ethereum’s price retained a narrow trading range on Saturday, unable to overcome the $200 resistance as cryptocurrency markets continued to search for new trading catalysts.  Meanwhile, the U.S. Securities and Exchange Commission (SEC) has brought more enforcement action to the ICO market this past year, sending a strong signal that the Ethereum-dependent crowdfunding model was facing heightened scrutiny from regulators.

ETH/USD Price Update

The ether price traded within a $5 range on Saturday, having pulled back from an intraday high of $202.49. At the time of writing, ETH was valued at $199.58, down 1.3% compared with Friday. A clean break above $200 has proven elusive for the second-largest cryptocurrency, which continues to show limited upside potential. Ether initially broke below $200 last Monday as part of a broad cool down in the cryptocurrency markets. However, subdued price action can be observed as far back as Oct 16.

Ethereum markets generated $1.4 billion in trade on Saturday, according to CoinMarketCap. That’s fairly consistent with the average daily volume exhibited over the past week. The blockchain has a total market capitalization of $20.6 billion, which is roughly $2 billion higher than XRP, the third-largest cryptocurrency by market cap.

SEC Widens Clampdown on ICOs

Initial coin offerings (ICOs) and digital assets have become a critical focus for securities regulators. In a new report, the agency’s Division of Enforcement said it implemented more than a dozen successful enforcement actions targeting token sales this this past year.

“While many of these cases have involved allegations of fraud, the Division also has pursued enforcement actions to ensure compliance with the registration requirements of the federal securities laws,” the enforcement division said in its annual report. “In the past year, the Division  has opened dozens of investigations involving ICOs and digital assets, many of which
were ongoing at the close of FY 2018.”

At the end of the fiscal year (Sept 30), the Division was working on more than 225 cyber-related investigations tied to token offerings.

Token offerings have generated more than $7 billion in funding this year but the extent of the contributions has declined significantly over the past five months. As Hacked reported on Thursday, the ICO market in October had its worst month since March 2017 in terms of total funds raised. It is estimated that more than three-quarters of ICOs use the Ethereum blockchain to launch their tokens.

The SEC’s latest enforcement actions have compelled more startups to pursue traditional securities offerings. The so-called security token offering (STO) operates very much like a publicly-traded company and is governed by federal laws established by the SEC. As it turns out, digital currency exchange Bithumb is planning to launch its very own STO platform in collaboration with SeriesOne, a U.S. fintech company. The STO platform would allow Bithumb to begin listing security offerings in the United States.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi