The U.S Securities and Exchange Commission has issued over 80 Cryptocurrency centered Subpoenas including TechCrunch founder Michael Arrington on his $100 million cryptocurrency fund according to CNBC. The agency has been increasing its crypto-related sweep as it hopes to ensure full compliance with applicable security laws.
Michael Arrington said:
“We received a subpoena. Every cryptocurrency fund I’ve talked to has received one,” (…) “That’s fine. They just have to figure out what they want.” (…) They need to set up rules so we can all follow them, and the market is begging them for that.” Arrington said in a CNBC interview.
On the matter of regulations, the mood remains uncertain on whether existing security laws apply to digital coins. SEC initially stated that digital coins are subject to security regulations, but no clarifications on how digital coin developers can comply with the regulations. This has led to crypto-funds to rely on lawyers and self-disclosure to distinguish their operations from crypto-scams, at times leading to the exclusion of U.S. investors from the sale.
In the last seven months, the agency has broadened its gathering of information on cryptocurrencies as most of the coins were attaining their all-time high. The cryptocurrency market to date has attracted billions of dollars as the ICO market start to gain mainstream media attention.
“Scores of subpoenas” the term used by the Wall Street Journal to report the subpoenas the SEC has issued including information on ICO sales.
The Year-Long Probe
According to Jason Gottlieb, a partner and lead cryptocurrency litigator at Morrison Cohen, the subpoenas are being issued from the SEC offices in New York, Boston, and San Francisco. Another source familiar with the subpoenas confirmed the statement. Gottlieb further said that he expects the well-planned investigation to run throughout the year.
The TechCrunch founder, Arrington said that it is a “shame” the U.S. has just frozen itself, due to the ongoing SEC investigations and a very uncertain atmosphere. He further said that from an investor point of view, he is turning to Asian countries for blockchain projects as they meet the “high-quality standards.”
The Global Digital Coin Approach
There is no standard crypto related regulations to date, with every country taking a different approach to its neighbors. In Asia, China banned ICOs, Japan licensed cryptocurrency exchanges while South Korea banned anonymous trading accounts and introduced a self-crypto regulatory body.
Various states in the U.S have taken a welcome-approach towards cryptocurrencies with the State of Wyoming, Florida, Tennessee, Arizona, Florida, Vermont and California passing various pro-crypto, ICO and blockchain acts. The Acts will still be subjected to the “Howey Test” that determines if an asset is a security.
Ryan Schoen, a senior financial policy analyst at Washington Analysis stated that the SEC investigation will eventually result in some tokens being categories as unregistered securities. He further said that he expects exchanges trading “unregistered securities” to follow in the SEC review.
Photo: Ginnifer Adam / Flickr