The Long Arm of the Law Comes to Cryptos, SEC Issuing Subpoenas
Tuesday evening the Wall Street Journal published an article that the Securities and Exchange Commission issued dozens of subpoenas and information requests from those involved with initial coin offerings (ICOs).
Let’s see what’s going on and the impact on crypto markets.
Those in the crypto market knew this was coming. SEC Chairman Jay Clayton issued a statement on cryptocurrencies and ICOs back in December.
Key points included:
A number of concerns have been raised regarding the cryptocurrency and ICO markets, including that, as they are currently operating, there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation.
Selling securities generally requires a license, and experience shows that excessive touting in thinly traded and volatile markets can be an indicator of “scalping,” “pump and dump” and other manipulations and frauds.
What he’s saying is that ICOs need to follow SEC regulations and in the eyes of the SEC pretty much every crypto is a security.
Token sales have already raised $1.66 billion in 2018 and are on pace to break the $6.5 billion raised in 2017. With such rapid growth the SEC is feeling the pressure to get a handle on the ICO market.
In this enforcement round the SEC is looking for info on how token sales and pre-sales were conducted. They’re also looking into SAFTs, simple agreements for future tokens.
What’s interesting is that while there appears to be a crackdown on the federal level, states are moving in the other direction. Wyoming passed a bill that allows ICOs to bypass securities regulations if they meet key requirements. And Arizona is going to accept cryptocurrencies for taxes.
It would be nice if the SEC took a cue from Switzerland’s Financial Market Supervisory Authority. They defined three classes of tokens, with only one class being a security.
Overall the market shrugged off the news and even rallied over the past 24 hours. I found that surprising.
What do you think of the SEC’s recent crackdown?
and trade cryptos on Binance
It’s all a ruse. This are just Shake downs before they buy up all the cheap supplies
agreed ... i believe youre right
About time... the ICO market was getting too crazy
True. Hopefully they're not too heavy handed though.
Some companies do need to be cleaned up, but yeah, too heavy-handed would mean stiffling innovation...
First they say crypto are a scam, and now they tax them.
They'll get to acceptance eventually ;-p
Denial: It's a scam
Anger: Stop turning your fiat to crypto, you fools!
Bargain: Maybe have Korea impose limitations?
Depression: That wasn't enough; people keep using crypto
Acceptance: Oh well, tax them as real money instead of the dept banks are printing
What will happen at the end?
That's a great question. I don't know how it will pan out but I imagine cryptos will follow the path of least resistance and move elsewhere if need be.
nice information sir about crypto.
Cheers!
I think as a whole crypto will be fine as it’s outside SEC reach. This could slow adoption though and for select individuals and companies it could be bad. Overstock is down roughly 5% since the news so it’s definitely taking a toll.
Some are saying it's designed as a preventive effort more so than actual enforcement. We'll see.
Agree though crypto will be fine. The market is up so that says everything.
Thanks for your informative article @g-dubs
Thanks!
thanks for giving essential information about cryptocurrency. keep it up.
Thanks!
whoever says it a scam, lately accepted it!
They all are going to do the same.
oh yea
yeah
good news, why only one is used, two more what's wrong?
???