Worrying news for crypto startups this week as prominent investor Michael Arrington threatens to stop investing in the United States based startups. In an era where business startups are mushrooming all over the globe, none are more common and prevalent than crypto startups. Crypto startups have been on the rise since cryptocurrencies became a thing and started gaining popularity steadily and slowly. Crypto startups have been popping at a fast rate since the crypto market boom in 2017. These startups are not cheap to set up though, which is why investors are so vital. Investors such as digital management firm Arrington XRP capital are therefore very important.
The news of Michael Arrington’s frustrations was revealed in a tweet he sent out on Friday morning revealing that Digital management firm Arrington XRP capital had received a second subpoena from the United States Securities and exchange commission since the firm was an active investor in a company of interest to the regulatory body in the united states. While further communicating his frustration he was quoted as saying: “ the legal costs of dealing with these are not insignificant. We will not invest in any further U.S deals until the SEC clarifies token rules. Pivot to Asia”
In a subsequent tweet, he added that Litchcheinstein was country of interest to him when it came to further investing. Arrington’s tweet did not reveal what company in the United States his firm had invested in that led to interest by the SEC or what information his firm was being petitioned to provide. He also did not reveal what the costs of responding to the subpoena would look like. Arrington joins a list of members from the crypto community who are growing increasingly agitated with the lack of clarity from the SEC on how the regulatory body classifies token sales. The big question is whether the regulatory body classifies them as securities or non-securities.
Members of the crypto community have joined to form a coalition to petition for the promotion of crypto businesses through setting up of a proper environment for the industry to thrive. A lobby group has also been hired to push for the same with Ripple being a key player behind that effort. Calls for clarity by the SEC was recently communicated when 15 congressional members sent a letter to the SEC after discussions with members of the crypto community. All eyes are on the SEC to see how they react to this. When reached for comment regarding his tweets, Arrington declined to comment further.
