Bitcoin regulation remains notably absent in the United States. At the same time, the SEC is expanding its enforcement in the crypto industry. From this point forward, the SEC will also focus on brokers and investment companies dealing with Bitcoin.
A New Ploy by the SEC
Regulatory efforts by the SEC show a clear trend. In the case of the cryptocurrency world, it appears the agency wants to legitimize these offerings. There has never been any indication of banning Bitcoin or other cryptocurrencies. For the industry, that is all one can ask for during these troublesome times.
Albeit there is no official regulatory system in place, the SEC closely monitors this industry. A crackdown on illicit investment schemes has become apparent over the past few months. Further clamping down on illicit activity remains a top priority. To accommodate the growing need for surveillance, officials will now oversee digital asset brokers and investment companies. It is another sign of further legitimizing cryptocurrencies as a whole.
For those keeping an eye on ICOs, this development is vital. It shows all assets through an initial coin offering are still considered to be securities at this stage. That also means companies need to adhere to federal securities laws. It is possible this new effort will force ICOs to avoid dealing with US investors altogether. The exact implication of this expanded enforcement remains a bit unclear.
The Crackdown on Securities to Date
Over the past few months, SEC officials have had their hands full. Focusing on the ICO industry has brought several irregularities to light. An order against Crypto Asset Management LP was field earlier in September. The company is not registered as an investment firm. Additionally, there are concerns regarding violating federal securities laws by this specific entity.
This was followed by enforcement action against TokenLot. A collaboration with FINRA resulted in shutting down the HempCoin offering. There are still a lot of unknown factors when it comes to initial coin offerings. The investment structure allows for some falsely advertised packages, as has become apparent in the case of HempCoin.
With the SEC expanding its enforcement, things will get very interesting. More efforts like these bring positive attention to digital assets as a whole. Until a proper regulatory ecosystem is established, additional efforts like these can be expected. This new enforcement also puts more pressure on the IRS to clarify its stance on regulating and taxing Bitcoin. No final decision has been rendered in that regard either.
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