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according to Jake Chervinsky, Kobre & Kim's Law Enforcement Law Enforcement Lawyer, says the second phase of implementing the US Trade Security Act (SEC) on cryptography is a slow and painful process for the sector.
Earlier this week, the US SEC cracked down on Paragon and AirFox, two first-time coin projects (ICOs) that raised $ 12 million and $ 15 million respectively in two different areas of the cryptography market.
The SEC would have targeted EtherDelta, Paragon and AirFox as a guiding solution and set a precedent in the cryptocurrency sector, and should clean every major sector of the ICO market in the months to come.
At the Investment Adviser Association's conference in Washington, DC, Stephanie Avakian, co-director of the SEC's Law Enforcement Division, hinted that dozens of OICs were currently doing business. 39, subject to investigation by the SEC.
Slow grind coming
The three projects that resulted in a settlement with the SEC in the past two weeks resulted in relatively low penalties ranging from $ 250,000 to $ 300,000. Paragon and AirFox were both fined $ 250,000 for issuing an unregistered guarantee, despite the obvious gap between the amount of funds raised by the two projects.
The SEC decided to impose a similar fine on both projects because the intention of the commission was to target major projects and set a precedent for the sector. Most importantly, however, the SEC refrained from proposing a clear direction for tokens to be considered securities other than securities under current regulations.
Chervinsky explained to each new industry that the SEC tended to use a strategy called "enforcement of control" and did not provide a clear set of rules to avoid legal conflicts with projects likely to lead to a state court or federal government to consolidate the process. regulatory nature of the project or market.
"This is a classic strategy of the SEC called" Application Orientation ". This can be deeply frustrating for a sector that needs a clear set of rules rather than a patchwork of orders. But regulators like it: this gives them the opportunity to exercise their discretion. The SEC rarely wants to test uncertain legal theories in the courts. If they were losing on a big issue – as if the chips were securities – this could disrupt their application strategy for the entire industry. The best way to avoid this result? Leave the rules vague and ambiguous. "
In its official announcement, the SEC stressed that it encouraged token issuers to cooperate with it, doubling its position of neutrality towards blockchain technology and its willingness to allow the ICO market to continue. operate as long as the token issuers comply with local law.
Titles are not all
Phase two of the implementation of cryptography regulation could involve taxes, money laundering, sanctions and many other areas that could create a harder and less convenient ecosystem for cryptocurrency companies.
In recent months, only the SEC has entered into agreements with companies to clean up the sector, but the Internal Revenue Service (IRS), the Commodities and Futures Commission (CFTC) and other agencies have been very weak. little involvement in the cryptography market.
"If I'm right, phase two is not very fun, it's a slow and painful slowness where the SEC cleans crypto space, one colony at a time. In a sense, it's the right approach. It's really not the job of the SEC to legislate, clarity must come from Congress. And if you're tired of hearing about regulations and enforcement, I regret to inform you that this is just the beginning. Securities laws are just one piece of the puzzle. We have to do it all again with the laws on taxes, money laundering, sanctions, et cetera. Sorry, said Chervinsky.
Pictures of Shutterstock
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