With Facebook's Libra turned out, regulators such as the Securities and Exchange Commission in the United States seem to be paying more attention to cryptocurrencies, not only frequent hearings, but also accusations and fines.
On September 24th, in response to cryptocurrencies and Libra's regulatory issues, the US Congress held a hearing on the theme "SEC Regulation: Wall Street Patrol Police." As far as ICO regulation is concerned, SEC Chairman Jay Clayton believes that ICO regulation remains a regulatory challenge. The current Securities Law has not really solved the problem. The current SEC regulation is still based on the protection of investors as the primary consideration. The SEC is looking for a broader and more effective approach to regulation.
SEC Commissioner Jackson believes that the SEC's rules are indeed lagging behind the development of the encryption industry. The SEC's rules should be toward encouraging cryptocurrencies and increasing the transparency of the industry for investors.
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In fact, more and more ICO projects are being targeted by the SEC, and fines and allegations are frequent. According to PANews, since August, the Securities and Exchange Commission has brought many companies to court. This article takes stock of six allegations in the cryptocurrency field since SEC, involving ICO project companies, digital asset exchanges, blockchain technology companies, rating companies, etc., and the publicly penalties range from 260,000 to $1,240,000. Wait.
SEC initiated six cases of crypto financing accusations since August
Time: August 12 Company: Reginald Middleton, Veritaseum Inc. and Veritaseum LLC Reasons: Fraud and unregistered ICO penalties: freezing assets suspected of $15 million in ICO fraud
On August 12, the US SEC filed a lawsuit against a New York man and two companies. The SEC accused these entities of fraudulent and unregistered ICOs between the end of 2017 and 2018 and requested the US District Court to urgently freeze the defendant's assets. The SEC formally filed suit against Reginald Middleton, New York company Veritaseum Inc. and Delaware-based Veritaseum LLC. The SEC said that from the end of 2017 to the beginning of 2018, the defendant raised about $14.8 million through ICO and claimed to make significant false statements and omissions to investors.
O2 Time: August 12 Company: SimplyVital Health. Inc Reason: Issuing unregistered securities Punishment form: refund of funds raised
On August 12, the SEC announced on the official website that it had filed a lawsuit against a New England-based blockchain company, SimplyVital Health. Inc., on August 12, as the company offered and sold approximately $6.3 million in unregistered shares. Securities.
O3 Time: August 20 Company: ICO Rating Reason: Failure to disclose the issuer's disclosure of proceeds from the issuance of its digital asset securities. Penalty: a fine of $260,000
On August 20th, the SEC issued a fine for the Russian encryption analysis company ICO Rating, because the company did not disclose how much money they paid for the positive rating of the encryption project. Currently, ICO Rating has agreed to pay a fine of US$268,998.
According to the SEC, ICO Rating evaluated a number of projects raised through specific ICOs between December 2017 and July 2018, but the SEC considers these projects to be securities and should disclose appropriate information to potential investors.
To this end, the SEC ruled that the ICO Rating rating violated the anti-selling provisions of Section 17(b) of the Securities Act of 1933. Without acknowledging or denying the SEC's findings, ICO Rating Ratings agreed to stop any violations of these regulations in the future, and to pay $106,998 in proceeds and deferred interest, and $162,000 in civil penalties. .
O4 Time: August 29 Company: Bitqyck Inc. and its founder Reason: Operating unregistered digital asset exchanges Punishment form: refund of $13 million to raise funds and civil fine of $ 1,024,000
On August 29, the SEC announced a lawsuit against Bitqyck Inc. and its founders alleging that it was suspected of defrauding investors by issuing securities and operating an unregistered exchange. It is reported that Bitqyck and founders Bruce Bise and Sam Mendez raised more than $13 million from more than 13,000 investors by creating and selling digital assets Bitqy and BitqyM.
David Peavler, director of the SEC Fort Worth Regional Office, said: "Digital asset investment is a very attractive new investment method, especially when investors recognize it, digital assets can easily enter the mass market."
In this lawsuit, Bitqyck needed to pay a civil fine of $8.5 million, and the two founders were fined a total of about $1.74 million.
O5 September 18 Company: ICOBox and its founder Nikolay Evdokimov Reason: Alleged violation of US securities law
On September 18, the SEC has sued ICOBox and its founder Nikolay Evdokimov as unregistered brokers and engaged in illegal securities issuance activities.
According to the SEC, ICOBox and its founder Nikolay Evdokimov illegally raised approximately $14.6 million in the sale of the company's ICO tokens to more than 2,000 investors, and promised to use these tokens to discount other cryptocurrencies on their platforms. But now these tokens are almost worthless.
O6 September 23 Company: Fantasy Market and its founders Reason: ICO was illegally issued
On September 23, the US Securities and Exchange Commission (SEC) accused Jonathan Lucas, 27, the 27-year-old CEO of online adult entertainment platform Fantasy Market, of allegedly manipulating a fraudulent first-time currency public offering (ICO) program in 2017. The prosecution documents show that, except for Lucas, all of the company's team members are fictitious, and the document lists many of the company's misrepresentations made when promoting ICO.
The SEC's attitude toward cryptocurrency is clear, that is, the digital currency generated by ICO is a security, so the issuance process needs to be regulated in accordance with the securities laws. Bitcoin is not produced by ICO, so Bitcoin is not a security and is not regulated by the SEC. But the ETF of digital currency belongs to the regulatory scope of the SEC. Currently, the SEC requires all ICO projects to comply with existing securities regulations and compliance registration, otherwise it will be severely hit.
SEC has now approved 39 STOs, 2 ICOs
Although the SEC has increased its regulation of illegal financing of encrypted assets, it has also tried to open up more channels. In July of this year, the SEC approved blockchain startup BlockStack to publicly issue digital currency in RegA+. In the same month, the SEC approved Props to issue STO in the same way, raising $25.6 million. According to data released by the Fire Coin Research Institute, as of October 2018, the SEC has approved 39 STO projects.
PANews was previously in the US SEC plus code supervision! I have been fined 12 ICOs, and the Chinese currency circle is also difficult to escape. In the article, it has been pointed out that in 2018, the United States incorporated cryptocurrencies into the existing securities supervision and added a series of regulatory policies. Since 2019, the United States has become more cautious about cryptocurrency regulation, and its policy has slowed down, gradually turning to normative policies.
In March 2018, the US SEC will regulate the initial public offering of the use of the SAFT agreement, which will issue subpoenas to 80 digital currency companies, including the SAFT agreement.
In May 2018, regulators in the United States and Canada jointly conducted about 70 investigations into the initial public offering of fraud and fraud in digital currencies, which was also called the “Digital Money Purification Action”.
In August 2018, Kenneth Blanco, director of the Financial Crimes Enforcement Agency (FinCEN) of the US Treasury Department, pointed out that regardless of whether the currency transfer institution of the convertible digital currency is located in the United States or abroad, even if the foreign entity does not have an entity in the United States, as long as its business is complete. Or part of the United States, should also comply with the requirements of the Bank Secrecy Act (BSA).
In July 2019, the New York State Department of Financial Services (NYDFS), a financial regulator in New York, established a new division within its jurisdiction to oversee the cryptocurrency business. The department will be responsible for tracking emerging financial technologies and will be responsible for authorizing and supervising virtual currency.
In fact, the US SEC's supervision of overweight is not a case. With the increasing use of cryptocurrency, regulators around the world are more cautious about the encryption field. In particular, after Facebook announced the formation of the alliance to issue Libra's non-sovereign stable currency, the eyes of the world refocused on digital currency. The emergence of Libra means that a large number of private investment institutions will enter the field of cryptocurrency. The digital economy will rise rapidly and challenge the status of sovereign currencies of various countries, which will bring new shocks to the entire financial and monetary system, which will force countries. Regulators have to speed up the regulatory layout of the cryptocurrency sector.
According to Jay Clayton at the hearing, Libra will let more people pay attention to encryption assets, especially for regulators. As a way of coexisting risk and income, encrypted assets have different characteristics from other securities and payment systems, and their supervision methods are different. Since the birth of Bitcoin in 2008, the development of the encryption industry is still in its infancy, and its supervision is still groping through the thorny roads of controversy and revision.
Text | Zhou Wenyi Editor | Bi Yi Tong