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SEC Regulation: Just What is Keeping Cryptocurrency Exchanges from Self-Reporting?

  by David Drake     Since its inception, the cryptocurrency industry has largely been unregulated. This has created a less rigid environment for innovative, blockchain-backed companies like BlockVest and AnthemGold to raise funds to finance their projects through initial coin offerings (ICOs). However, the unregulated cryptocurrency space has created opportunities for scams. To guard investors against fraudulent actions, there have been calls to governments to put regulatory measures in place. In February this year, the Securities and Exchange Commission (SEC) targeted 80 ICO companies that it believed were in breach of securities laws with subpoenas. The regulator could be planning to launch another crackdown, this time on cryptocurrency exchanges. Earlier this month, the agency, through its Director for Trading and Markets Division, Brett Redfearn, said it is surprised that despite several cryptocurrency exchanges operating in the US, the level of self-reporting is quite low. This follows the clarification made by ... Read More »

What Really is Discouraging Crypto-Exchanges from Self-Reporting to the SEC?

  by David Drake     Tech advancements have led to the emergence of the cryptocurrency industry, enabling companies like BlockVest and SportsFix to develop innovative business models backed by blockchain technology. However, the regulation cloud has been hovering over the industry for much of the first quarter this year. The Securities and Exchange Commission (SEC) has made it clear that it considers tokens issued during initial coin offerings (ICOs) as securities. This means that regulation of digital assets falls within its regulation jurisdiction and cryptocurrency exchanges that trade such assets in the US need to register with the agency. However, in the past few months, the SEC has recorded low self reporting among exchanges. Through its Director for Trading and Markets Division, Brett Redfearn, the SEC has expressed shock by the lack of self-reporting, yet a number of exchanges are trading ICOs in the country. The Tokens as Securities Argument ... Read More »

Why Low Registration of Exchanges Could be Driven by Oversight Fears

by David Drake   Regulation of the cryptocurrency market has been a contentious issue after the remarkable performance of leading digital currencies like bitcoin and ether in 2017. At the beginning of 2018, the crypto market experienced a major clash following regulatory crackdowns by the South Korean and Chinese governments. In the US, the Securities and Exchange Commission (SEC) sent shock waves across the market after it subpoenaed some 80 companies that were deemed to have launched initial coin offering to raise capital for their blockchain-based projects. Over the last couple of months, discussions have emerged on whether or not digital assets constitute as securities. According to the SEC, tokens issued during ICOs and other digital issues should be treated as securities and, therefore, should be subjected to its regulation. This notwithstanding, the regulator appears to be sending a contrary message that leaves players confused according to Wealthman’s Legal team ... Read More »

Why Crypto Exchanges are Not Registering with the SEC

    by David Drake   In February this year, the Securities and Exchange Commission (SEC) issued legal summons to about 80 companies in the cryptocurrency market in a major regulatory crackdown. Media reports at the time showed the regulator was looking for ways to structure the initial coin offering processes that have remained unregulated. The SEC took this move based on its belief that ICO companies that fund companies who raised funds through the sale of tokens were in breach of the securities laws. A few months later, another SEC could be looming. Through its Director for Trading and Markets Division, Brett Redfearn, the regulator has said raised concerns over the low level of self reporting among cryptocurrency exchanges. Previously, the Chairman of the SEC, Jay Clayton, has said that tokens and other digital assets issued during ICOs are securities and therefore subject to regulation by the agency. By ... Read More »

Why Definitive Laws are Necessary to Increase Compliance by Exchanges

  by David Drake   Brett Redfearn, Director at the Securities and Exchange Commission (SEC) Trading and Markets Division, has raised concerns over the lack of self-reporting by exchanges trading in digital assets. In an interview with the CBS, Redfearn termed the level of self reporting to the SEC by cryptocurrency exchanges as ‘underwhelming’. His sentiments come shortly after the SEC Chairman, Jay Clayton, categorically stated that tokens and digital assets used in initial coin offerings (ICOs) are securities and should be registered with the agency. According to Chris Butler, president of URAllowance, the main reason why exchanges are reluctant to self-report to the SEC is the vagueness of laws that govern the cryptocurrency sector. He says, “Exchange owners know that reporting will have an effect on their bottom line. Until lawmakers give tokens and ICOs a definitive section in the labyrinth of US laws, exchange owners will be going ... Read More »

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