Witch Hunt and new Inquisition from SEC: trials, fines & bans. Which cryptocurrencies are safe and which are in danger

From this review, you will learn the U.S. Securities and Exchange Commission (SEC) attitude to the blockchain and cryptocurrency market in general, which currencies can feel confident in the US market, which ICO the Commission does not allow, and why it does so.

SEC General Crypto Policy

  • Such securities must be registered, otherwise, they will be outlawed.
  • Tokens can be called whatever you like, but if they have signs of securities, then SEC should deal with them.
  • The release of tokens can carry risks and can contain signs of frauds and manipulations.

The tokens aren’t considered as securities if it fits the next criteria:

  • The decentralized part of the token works and allows transactions.
  • The token is used not only for market speculation.
  • A token can be considered as an asset to preserve value (the role of a financial instrument).

In December 2017, the Commission represented by Chairman Jay Clayton made one of the most significant statements regarding its position on cryptocurrencies and ICOs. Recognizing the significant contribution of the new blockchain technology to investment opportunities, the Commission calls for careful study of the subject of the transaction and an approximate list of issues that will help to ensure the safety and legality of this investment.

At the end of 2018 two cryptocurrency startups — CarrierEQ Inc. and Paragon Coin Inc. — agreed (under pressure from the regulator) to register tokens issued during the ICO as securities. They also had to pay fines of $250 thousand.

Back in 2019, John Reed Stark, Former Chief of SEC Office of Internet Enforcement, stated with absolute certainty that he was confident that the U.S. regulators would eventually drive cryptocurrencies out of the U.S. financial market. He : “Much of Bitcoin’s value, outside of mere speculation, is derived solely from its ability to facilitate criminal activity.”

SEC Investigation vs. DAO

SEC attitude to Bitcoin

SEC attitude to Libra

SEC attitude to Ethereum

SEC vs. Enigma

After several court hearings, the Enigma organizers surrendered and pleaded guilty. Enigma representatives agreed with the decision to pay a $500,000 fine and assured they were ready to return investor funds.

The company will register its tokens as securities and will be able to sell it on the exchanges in the future.

The fight of SEC with cryptocurrency exchanges and other entities

The SEC is officially positive about blockchain technology, but it is extremely wary of the ICO of most cryptocurrencies and closely monitors the activities of cryptocurrency exchanges falling under US jurisdiction. Separately, Bitcoin and Ethereum have no special problems, but the rest of the cryptocurrencies usually fail to enter the US market and carry out ICOs without the Commission’s oppositions. This suggests that while US regulators do not want to give freedom to the cryptocurrency market.

Originally published at https://coinjoy.io.

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