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SEC’s Latest Focused Area Revealed: Probing Cryptocurrency Enterprises!
SEC’s Latest Focused Area Revealed: Probing Cryptocurrency Enterprises!
By:
Elif Azra Güven
04.07.2024 – 16:18
Update:
1 second ago
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The U.S. Securities and Exchange Commission (SEC), a long-time observer of the cryptocurrency realm, is gearing up for fresh investigations aimed at the cryptocurrency sector,
As per DL News, the SEC is delving into the activities of cryptocurrency venture capital entities. Allegedly, the SEC is accusing these crypto venture capital organizations of vending unregistered securities.
During an appearance on the Unchained podcast, Ari Paul, the Chief Investment Officer of BlockTower Capital, indicated that the SEC is scrutinizing these firms for potentially engaging as unregistered securities dealers.
Ari Paul highlighted that these inquiries demonstrate the SEC’s escalating scrutiny on the digital asset industry under the leadership of Chairman Gary Gensler. He defended the SEC’s moves, asserting that some VCs are playing the role of securities dealers by forming agreements with cryptocurrency projects before their tokens are publicly tradable.
The renowned figure elucidated how some VCs are infringing securities regulations. According to Paul, prior to the launch of a cryptocurrency project’s token, their team commonly strikes deals with market makers or venture capital firms. These agreements involve commitments from the crypto project to vend VC tokens at a substantial discount from their anticipated future trading price, with the expectation that the VC will promote the token in return.
“Analyzing these compacts between cryptocurrency projects and crypto VCs, it’s observable that the VCs are behaving akin to securities dealers.
And from an ethical perspective, they are evidently operating akin to a pump-and-dump mechanism.”
Under the stern oversight of Gary Gensler, the SEC has lodged lawsuits against Coinbase, Kraken, and Binance, alleging that they unlawfully provided unregistered securities to investors.
Associated News
Breaking News! SEC Sues Coinbase Following Binance!
Additionally, the DeFi sector couldn’t evade the stringent actions of the SEC. On June 28, the SEC initiated legal action against Consensys, implicating the firm in unregistered securities sales through the MetaMask staking service.
*This does not constitute investment advice.
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