SEC’s Active Role in Cryptocurrency Regulation
According to Stephanie Avakian, Co-Director of the Enforcement Division at the SEC, the agency is currently deep in the trenches of the cryptocurrency battlefield. Avakian confirmed that they are pursuing numerous investigations into the murky waters of cryptocurrencies, reacting to rising concerns that many companies are not adhering to securities laws. “We are very active, and I would just expect to see more and more,” she stated, hinting at the increasing vigilance of regulators.
Subpoenas and Initial Coin Offerings (ICOs)
Avakian’s comments follow a spate of news regarding the SEC’s issuance of subpoenas aimed at companies perceived to be veering off the legal path through their ICO activities. This isn’t just a slow drip of scrutiny; it’s more like an oncoming flood. The SEC has wielded its regulatory hammer to investigate more than a handful of companies since September 2017, instilling a sense of urgency in the crypto world that compliance is no longer optional, it’s essential.
The Recent Regulatory Developments
Mark your calendars for March 7th—this was when the SEC dropped a bombshell reminder to cryptocurrency trading platforms that they fall under the SEC’s regulatory umbrella. This announcement has been short and sweet but carries loud implications: platforms must register as exchanges or face the music. Frequent disruptions to trading, as seen in February, raised eyebrows and concerns about three companies whose operations were temporarily halted due to their cryptocurrency associations.
The Chaotic Nature of Cryptography Regulations
The cryptocurrency landscape resembles a tangled web of regulations—and not the good kind. As noted by Mike Lempres, Chief Legal and Risk Officer at Coinbase, the discord among major financial regulatory bodies is palpable. Each regulatory body has its own perceptions of cryptocurrencies. The SEC classifies them as securities, the CFTC sees them as commodities, the IRS treats them like property, and let’s not forget FinCEN, which considers them currency. So, who’s right? We might as well compare them to a family trying to agree on what to have for dinner—no one can decide!
The Future of Cryptocurrency Regulation
The future appears uncertain regarding regulatory clarity in the U.S. Cryptocurrency enthusiasts are in a position reminiscent of a high-stakes poker game—betting on the hope that the right laws will come into play before they find themselves facing the regulatory dealer’s hand. Bit by bit, the SEC’s active pursuit of compliance may shape a healthier, more robust market. However, until a coherent regulatory framework emerges, players in the cryptocurrency arena must remain alert and prepared for any sudden regulatory curveballs.
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