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SEC, CFTC intervention is a wake up call for crypto space
Trade Journal
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Regulators have cracked down on fraudulent practices but market participants suggest that it's business as usual for the securities industry The two US securities regulators have taken a number of steps to prevent fraud and illegal activity in the burgeoning cryptocurrency space, after months of warnings. Although not entirely unexpected, the move serves as a wakeup call to startups looking to enter the sector, and shows that the regulators don't intend to allow unlawful activity to go unchecked going forward. In what can only be viewed as a tussle for dominance in the space, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have each taken a number of steps. The CFTC sued so-called scam coin My Big Coin last week, which had embezzled as much as $6 million from investors, and on Monday issued a subpoena to the Bitfinex exchange and its partner currency Tether, a coin that claims to be linked to and backed by US dollar reserves. CFTC chair Christopher Giancarlo recently stressed that cryptocurrency futures should not be so easy to manipulate, and as such should be subjected to sufficient margin requirements. Next week both regulators will participate in a hearing to the Senate Banking Committee to testify on cryptocurrencies. Although sudden, market participants suggest that this is not unexpected. Both regulators have been indicating since...
Last month it issued a cease and desist for the ICO of Munchee – a restaurant app that had raised $15 million – stating that the tokens constitute securities and must be registered as such.