The Securities and Exchange Commission Is Getting Nasty On Crypto

With drooping markets, crypto prices that continue to drop, regulation uncertainty, political turmoil headlining almost all of the news lately, and big stories like eBay, Visa and Mastercard dropping association with Facebook’s Libra, you may have missed a couple of things in recent weeks.

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For those not paying close attention, the SEC made a couple of moves that we should probably be watching a lot more closely.

On September 30, they announced that charges against blockchain technology company Block.one have been settled with a $24 million civil penalty. The SEC went after Block.one for failing to “register its ICO as a securities offering pursuant to the federal securities laws, nor did it qualify for or seek an exemption from the registration requirements.”

This likely comes as unwelcome news to the crypto startup that was able to raise $1.7 billion, Telegram. The SEC filed a lawsuit against them last week, putting a halt on the distribution of their altcoin Gram.

Around that same time, the proposal by Bitwise Asset Management and NYSE Arca to create a bitcoin-backed exchange-traded fund (ETF) was shot down by the SEC.

Furthermore, earlier this week a G7 task force issued an official statement that claims Libra and cryptocurrencies like it will pose a “risk to the global financial system.”

Most of you are very well aware that FinCEN, also known as the U.S. Financial Crimes Enforcement Network, has classified crypto exchanges as “money transmitters” that are bound by certain niche laws. However, there’s a lot more to it.

• The SEC considers digital assets to be securities.
• The Commodity Futures Trading Commission (CFTC) classifies them as commodities, which allows them to be publicly traded.
• The IRS has classified them as property with value, meaning they are taxable commodities.
• Crypto laws can vary from state to state in the U.S.
• Congress’ Joint Economic Report (JER) last year indicates there is a forthcoming more streamlined regulatory approach to crypto.

This “uncertainty” has caused a lot of rumbling throughout the entire industry. eBay, MasterCard, and Visa, just announced that they’ve pulled out of the Libra project completely and other projects that held promise are facing the reality of dwindling enthusiasm.

Other than Senator Warren taking aim at Zuckerberg and Facebook recently, talk of regulation in our industry seemed to quiet down in recent weeks. However, a peek beneath some of the headlines reveals that there’s still a lot going on.






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