The U.S SEC All Out to Terminate Illegalities in the Crypto Exchange World
It is often said that “orderliness is a virtue that is key to avoiding abuse in any area or discipline in life”.
This certainly is not restricted to any industry but cuts across all industries, including the world of Cryptocurrencies.
SEC on the Watch
The US Securities and Exchange Commission (SEC) has started to look critically into the activities of Hedge Funds for Cryptocurrency assets by Crypto Exchangers.
SEC chairman Jay Clayton made it known that a handful of Cryptocurrency ICO offering securities is not registered.
This called for SEC issuing numerous warnings to Cryptocurrency Exchange firms letting them know that it is a crime to list security tokens without being properly registered with the SEC.
It also wants them to know that listing security tokens with an unknown issuer is also an illegal act that is punishable.
This warning is to encourage and gear the industries participants to comply with the rules and regulations of SEC.
Hedge Funds on the Increase
A report according to Bloomberg tells us that SEC is on the move to gather information on the business activities of some Crypto assets Hedge Funds. Presently, there are over 220 hedge funds; 187 of them have been in existence since 2017.
Most of these firms manage less than $150 million worth of crypto assets; as a result, they register and are regulated by the state instead of SEC.
The report also made it known that subpoena was sent to various ICOs and advisers including Overstock subsidiary tZero demanding that they present information related to their token sales.
The reason for this action is so that regulators can determine the methodology by which crypto assets investments and their prices are evaluated; which should basically be by –stakes in ICO tokens and – custodial policies, and to ensure that their alleged fear that funds have run afoul is false.
SEC is also interested in knowing whether fund managers are secretly investing in the ICO tokens and also to identify the relationships between hedge funds and ICO operators.
Since the beginning of this investigation, regulators have also increased their activities on ICO inspection.
Since SEC has been given the responsibility to make rules and regulations to guide the Cryptocurrency Asset Space, they sure are not slacking in carrying out that duty. We only hope that the bad eggs are fished out on time before it gets out of hand and the industry gets saturated by cheats.
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