SEC news

The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government. The SEC holds primary responsibility for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry, the nation's stock and options exchanges, and other activities and organizations, including the electronic securities markets in the United States.

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Cryptocurrency client base up by 122% in 2018, suggests Silvergate Bank’s report filed with the SEC

The advent of the bear market created a ruckus in the world of cryptocurrencies, with prices crashing, and market caps becoming a shadow of its highs in 2017. According to a recent report released by Silvergate Bank however, the number of clients coming into the field of cryptocurrency surged, despite the coins’ poor performances. The report stated that in 2018, the number of its clients venturing into the digital assets world stood at 542, while it was just 244 in 2017. Total deposits also increased by 8 percent, from $1.46 billion to $1.58 billion. Despite the positive news however, Silvergate Bank warned users about the risks involved in the space. The bank stated, “Our business is subject to many substantial risks and uncertainties you should consider before deciding to invest in our common stock … including risks that that the digital currency industry may not gain widespread adoption, that legal and regulatory uncertainty regarding the regulation of digital currencies and digital currency activities may inhibit the growth of the digital currency industry, that our low-cost funding strategy may not be sustainable, that our deposits may be adversely affected by price volatility.” The report also listed out the factors affecting the development of the digital currency industry, which included factors such as price volatility and the involvement of the Securities and Exchange [SEC]. The report elucidated, “…government and quasi-government regulation of digital currencies, their use, and intermediaries and other businesses involved in digital currencies, noting in particular that the SEC has taken action against several cryptocurrency operators and has raised questions whether certain digital currency exchanges must be registered with the SEC to continue operating;” Other factors affecting the propagation of digital assets included the restrictions on or regulation of access, related to cryptocurrency exchanges. The SEC has been quite active with respect to the field of cryptocurrencies, something made evident by the comments from Valerie Szcepanik, the SEC’s advisor for Digital Assets. She said, “I’ve seen stablecoins that purport to control price through some kind of pricing mechanism, whether it’s tied to the issuance, creation or redemption of another type of digital asset tied to it, or whether it is controlled through supply and demand in some way to keep the price within a certain band.” The post Cryptocurrency client base up by 122% in 2018, suggests Silvergate Bank’s report filed with the SEC appeared first on AMBCrypto.
AMBCrypto

Volkswagen Faces SEC Lawsuit Over “Dieselgate” Scandal

German automaker Volkswagen is facing a lawsuit filed over its actions toward investors during the so-called “Dieselgate” scandal. Filed by the Securities and Exchange Commission (SEC), the lawsuit alleges that the automaker allowed investors to buy $13 billion worth of company bonds despite being aware of a growing scandal involving illegal software used to manipulate emissions’ testing results. The “Dieselgate” scandal of September 2015 revealed that Volkswagen cheated emissions tests on its diesel cars by installing illegal software to give them lower pollution readings. Since then, it has snowballed into an expensive global fiasco, costing the company more than $30 The post Volkswagen Faces SEC Lawsuit Over “Dieselgate” Scandal appeared first on CCN
CCN

SEC Steps Up Efforts to Regulate Virtual Currency Offerings and Exchanges

The US Securities and Exchange Commission (“SEC”) has recently stepped up its enforcement actions against virtual currency exchanges and Initial Coin Offerings (“ICOs”) that violate federal securities laws. Due to the highly technical nature of virtual currency and its underlying technology, the area long operated as a sort of financial Wild West, with consumers and unskilled investors falling prey to overly risky investments and outright frauds. Since November 2018, however, the SEC has issued at least four virtual currency-related enforcement actions and put the industry on notice that it will be monitoring its actions. What are Virtual Currencies, ICOs and Blockchains? Understanding the relationship between virtual currency exchanges, ICOs, and federal securities laws, at even a basic level, requires an understanding of certain underlying terminology. The SEC has provided a useful primer. As the Commission explains, ICOs rely on “virtual currency,” which companies create and disseminate using “blockchain” technology. “A blockchain is  an electronic distributed ledger or list of entries—much like a stock ledger—that is maintained by various participants in a network of computers.” The most well-known example of blockchain technology is the Bitcoin blockchain; however, hundreds of public blockchains exist. Blockchains use cryptography to process and verify virtual currency transactions on their ledgers. A virtual currency is a digital representation of value that companies and investors can buy and sell. Raising Capital with Virtual Currency Recently, some companies have begun using virtual currency—typically referred to as virtual “coins” or “tokens” – to raise capital. As the SEC explains in its Investor Bulletin, promoters of these virtual tokens frequently tell purchasers that the capital raised from the sales of these virtual tokens will be used to fund the development of a digital platform, software, or other projects, and that purchasers can expect a return on their investment or participate in a share of the returns provided by the project. Purchasers are typically able to use fiat currency—i.e., government-backed legal tender—or other forms of virtual currency to buy these virtual tokens. At the same time, other companies have begun to open “virtual currency exchanges”: platforms enabling investors to exchange virtual funds, including virtual coins or tokens, for fiat or virtual currency. Both of these services may be subject to securities laws. Are Virtual Currency Exchanges Subject to Securities Laws? As an initial matter, Sections 5(a) and 5(c) of the Securities Act of 1933 prohibit the unregistered offer or sale of securities. 15 U.S.C. §§ 77e(a), (c). A security includes “an investment contract,” defined by the Supreme Court as “an investment of money in a common enterprise with profits to come solely from the efforts of others.”  S.E.C. v. Edwards, 540 U.S. 389, 393 (2004); 15 U.S.C. §§ 77b–77c. The SEC has determined that virtual tokens frequently meet this definition and are therefore securities within the definition of the Securities Act. See, e.g., Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO, SEC Release No. 81207, at 11–14 (July 25, 2017), (hereinafter “DAO Report”; the DAO in this report is an example of a Decentralized Autonomous Organization, which is a virtual organization executed on a distributed blockchain). To the extent offerors of virtual tokens that meet this definition fail to register the securities with the Commission, they have violated the securities laws. In addition, the SEC regulates “exchanges,” and under the Securities Exchange Act of 1934, it is unlawful for an exchange to effect any transaction in a security unless the exchange has registered with the Commission as a national securities exchange or is exempted from such registration. 15 U.S.C. §78e. The Exchange Act defines an “exchange” as “any organization which provides a market place or facilities for bringing together purchasers and sellers of securities or for otherwise performing the functions commonly performed by a stock exchange as that term is generally understood[.]”  15 U.S.C. § 78c(a)(1). The SEC has stated that virtual currency exchanges may constitute non-exempt exchanges under the Exchange Act. See DAO Report at 17. Protecting Investors from Fraudulent Virtual Currency Operations The SEC’s recent spate of enforcement actions against ICOs and virtual currency exchanges demonstrates the application of these interpretations of the securities laws to four such entities. First, on November 8, 2018, the SEC settled charges it had brought against Zachary Coburn, the founder of EtherDelta, for operating an unregistered virtual currency exchange. EtherDelta provided an online platform for secondary market trading of ERC20 tokens, a blockchain-based token frequently used in ICOs. Mr. Coburn agreed to pay nearly $400,000 in disgorgement and penalties. On November 16, 2018, the SEC settled cases with two companies that sold virtual tokens through ICOs: CarrierEQ Inc., also known as Airfox, and Paragon Coin Inc. The companies raised $15 million and $12 million, respectively, through their ICOs, without registering the tokens as securities. The companies both agreed to pay $250,000 fines to the SEC. Related: SEC Charges Floyd Mayweather and DJ Khaled for Unlawfully Promoting Fraudulent ICO At the end of November 2018, the SEC reached an informal resolution of charges it brought against two celebrity endorsers of ICOs, boxer Floyd Mayweather Jr. and music producer DJ Khaled. In both cases, the celebrities had failed to disclose that Centra Tech Inc. had paid them significant sums to tout the company’s upcoming ICO on their social media accounts. Collectively, the two celebrities were forced to pay the SEC over $860,000 in disgorgements and penalties. Finally, on December 11, 2018, the U.S. District Court for the Northern District of Texas ordered that Jared Rice Sr. and Stanley Ford, two former executives of AriseBank, pay nearly $2.7 million in disgorgement and penalties for their role in perpetrating a sham ICO scheme in an effort to defraud investors. The recent SEC enforcement actions against unregistered ICOs and virtual currency exchanges are great news for the investing public, particularly people without experience in traditional investing, who are more likely to be drawn to unregistered and unsafe virtual currency offerings. For example, surveys have shown that over 58 percent of Bitcoin investors are between 18 and 34 years old. It is critical that the SEC continues to take steps to protect these vulnerable investors from unstable and/or fraudulent virtual currency operations. The post SEC Steps Up Efforts to Regulate Virtual Currency Offerings and Exchanges appeared first on CryptoSlate.
Cryptoslate

Former CFTC Chairman Wants the SEC and the CFTC to Better Regulate Crypto-Assets

According to a March 18, 2019, working paper published by former Commodity Futures Trading Commission (CFTC) Chairman Timothy Massad, the large gap in crypto-regulations in the U.S. has led to continual frauds and weak investor protection in the budding cryptocurrency ecosystem. Lack of Regulations a Menace for the Industry Regulations and compliance in the cryptospaceRead MoreRead More. The post by Aisshwarya Tiwari appeared first on BTCManager, Bitcoin, Blockchain & Cryptocurrency News
BTC Manager

Brookings Institute Says the SEC Should Regulate Crypto-Assets

A report from the Economic Studies program of US think tank, Brookings, claims better regulation will benefit the crypto industry. It states that crypto-assets currently fall into a jurisdictional gap, and that the SEC should fill that role. Don’t Hate The Game, Hate The Players The report immediately scores an own goal with the choice of title – “It’s time to strengthen the regulation of crypto-assets.” This suggests that cryptocurrency itself is inherently insecure or in need of regulation, which is clearly not the case. The report actually discusses the regulation of cryptocurrency intermediaries, which, as recently noted by the Winklevii, is an altogether different thing. Anyway, the Brookings report suggests that better regulation of crypto-companies will: benefit crypto investors, further the development of new technologies, curtail the use of crypto-assets used for illicit payments, and reduce the risk of cyber attacks. In which case we should surely all be calling for it! The Case For The Prosecution Again, the report tries to pin this on Bitcoin, claiming that it does not provide the ‘trustless’ environment it promised. It says crypto-assets ‘created’ new financial intermediaries that are less accountable than the big banks. Not entirely true. A fledgling industry sprung up around crypto-assets, at a time when regulators didn’t want to touch it. That’s hardly the fault of Bitcoin, which simply provides a trustless way to transact in peer-to-peer fashion. Some of the players in this new industry have taken advantage of the regulatory vacuum. There are bad players who don’t record assets on the blockchain, who manipulate markets, and who trade against their customers. Which of course, has never happened in the ‘regulated’ banking industry. The report also claims that inadequate regulatory oversight with respect to cybersecurity leads to hacks. Which may be true, but then it rolls out the old dark-web argument, which isn’t, and states that: Crypto-assets are used increasingly to avoid government sponsored sanctions Like those in Venezuela? Well that puts a whole new angle on those poor, starving, rule-breakers! SEC? CFTC? WTF? The report claims that “New crypto exchanges and trading platforms are not subject to the traditional standards required of securities and derivatives market intermediaries.” However it follows that up by saying, “The SEC has jurisdiction over crypto-assets deemed securities,” and “Derivatives based on crypto-assets are subject to CFTC regulation… as are the platforms that trade such derivatives.” So the Securities and Exchange Commission has jurisdiction over crypto-assets deemed securities, which is almost all of them (according to the SEC)? And the Commodity Futures Trading Commission (CFTC) has jurisdiction over any platform which trades derivatives such as futures or swaps? So the gap is essentially… just the cash market for buying and selling bitcoin? The report’s author, Timothy G. Massad, recommends that no new regulatory agency is needed. Instead, the SEC should regulate this… or failing that, the CFTC. The State Of Independence Shall Be The very first page of the report proper, see’s Massad make a clear ‘Statement of Independence’. The author did not receive any financial support from any firm or person for this article or from any firm or person with a financial or political interest in this article. They are currently not an officer, director, or board member of any organization with an interest in this article. Hmmmm… Not currently, no. But he did serve as chairman of the CFTC under the Obama administration. And would perhaps be in line for a similar role the next time there is a Democrat in The White House? Massad is also the author of the report on Brookings website, announcing the article, in which he repeatedly refers to himself in the third person. Surely they could have found somebody else to write the article? It’s all a bit self-promotional and slightly schizophrenic-feeling. Knowing this, it seems likely that Massad has also had a hand in editing his own Wikipedia page. Not that there is anything wrong with this, but it is hard to think that an independent observer would see fit to note: Massad is an accomplished expert cook… He is known at Treasury for running a baking contest among his staff. That’s not to say that Massad is wrong in suggesting that some regulation of businesses that handle cryptocurrency would be beneficial, he just goes about it all in a rather disingenuous fashion. Do you agree with the Brookings report that the SEC should regulate cryptocurrencies? Share below! Images courtesy of Shutterstock The post Brookings Institute Says the SEC Should Regulate Crypto-Assets appeared first on Bitcoinist.com.
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HIGHLIGHT

The Market Responds Nonchalant to CBOE BTC ETF Pull Out

Yesterday, 23 January, the US Securities and Exchange Commission released a two-page document revealing the temporary withdrawal of the proposed rule change by the Chicago Board Options Exchange (CBOE) BZX Exchange Inc. This proposed rule change was said to lay the groundwork for the long-anticipated VanEck/SolidX BTC ETF

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DIGEST

Thailand plans to relax laws on ICOs, Bermuda issues a draft regulation, CONSOB halts Avacrypto, USA introduces the Token Taxonomy Act, CFTC questions about Ethereum, a report on Belgium, UAE, the EAEU, and Abkhazia, UAE plans to finalize regulations in 2019, Israel enlists the help of locals, South Korea regulators indict three Upbit employees, FCA is set to receive new duties

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DIGEST

CONSOB suspends two projects, Kakao invests in Orbs, TokenSoft invests in a SEC-compliant broker-dealer, Weiss Ratings recommends to buy BTC, France wants to invest $569M in blockchain, crypto-focused VCs invest $30M in Good Money, Tim Draper invests $1.25M in OpenNode, Waves partners with TSA, ICON partners with LayerX, BitDeer teams up with BTC.com and AntPool

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ESSENTIAL

A Security Token Offering (STO) is a form of raising capital for a startup by distributing tokens to investors. While ICOs mainly deal in utility tokens that grant their holders access to services and products associated with respective blockchains and dapps, security tokens can be thought of as digital documents representing the investor’s rights to equity, a revenue share, debt, etc. STOs provide a better investor protection as they need to be compliant with appropriate regulations

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DIGEST

HKEX plans to create a blockchain platform, Taiwan implements new amendments to AML and CFT laws, SEC ceased over dozen illegal ICOs, RFB demands monthly reports from crypto exchanges, Petro recognized as a legal tender, crypto industry to regulate itself in Japan, HSBC and RIL settle India’s first LoC transaction on blockchain, ASB settles New Zealand’s first export deal using blockchain

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DIGEST

Russia edits its draft law on cryptos, Japanese crypto exchanges gain power to self-regulate, Albania plans for regulatory framework, FATF to come up with its first set of crypto rules, CGL partners with National Bank of Canada and Skuchain, China plans implementation of new rules, SEC confirms the launch of FinHub, owner of Unocoin arrested for operating BTC ATM

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Tron Based ‘Stable Coin’ to Start Trading At Huobi and Okex Exchange

Okex and Huobi Global have added support for USD Tether pegged to the US Dollar built on Tron. Tron Foundation built the ‘stable coin’ collaboration with Tether. Currently, the two Exchanges support three stable coins markets USDT-Tron (TRC20), USDT-OMNI, USDT-ERC20 (Ethereum). The token will be launched on 30th April 2019 on the Okex and Huobi Global Exchanges. According to the press release by Okex: In order to meet users’ demand for stablecoin trading, OKEx will support USDT-TRON, the TRC-20 based USDT token co-developed by TRON and Tether, as well as the airdrop for USDT-TRON holders. …It has a TRON deposit address and uses the TRON network for depositing and withdrawal. Rewards for Early Adopters and Tron’s Growth The annual percentage return (APR) of the USDT-TRON token has been designed to give out rewards for its early adopters. The initial APR is 20% which will, however, reduce with time. Nevertheless, the program is supposed to roll out investments for a total of 100 days. The total amount of incentives will be $20 million. The incentives will be rewarded in USDT-TRON only. Justin Sun has implored the users of the Exchanges to adapt to swap from USDT-OMNI – USDT-TRON. #Hodl USDT-TRON to earn initial 20% APR in USDT-TRON. 100 day campaign. $20M initial budget no hard cap. Just sayin'. 😎 $TRX $BTT pic.twitter.com/jyo7QcrtbE — Justin Sun (@justinsuntron) March 21, 2019 The Stable coin will be available on major exchanges, and the reward programs are lucrative. Therefore, the number of transactions on the Tron Network would increase significantly. Tron has built a vibrant ecosystem for Dapps and issuing digital asset. The move will foster the growth of Tron. It will also help the exchanges take advantage of the transaction capabilities of Tron which is considerably cheaper than Ethereum currently. The returns proposed by ARP are highly lucrative. Will you swap your stable coins to earn the rewards?  The post Tron Based ‘Stable Coin’ to Start Trading At Huobi and Okex Exchange appeared first on Coingape.
CoinGape

Get EOS Airdrop Token Every Hour Is Now Possible on Infinito App Square with PRA CandyBox!

SINGAPORE, Mar 22, 2019 - (ACN Newswire) - Infinito Wallet's crucial partnership with global leading EOS block producers and block producer candidates comes along with valuable benefits for users. This March 13th, support for EOS DApps will officially be available on Infinito Wallet's newly launched App Square and the well-known EOS token distribution DApp - PRA CandyBox will be at Infinitors' service along with a great deal of airdrops everyday.Developed by ProChain based on the EOS main network, PRA CandyBox is the top 1 EOS DApp listed on DappRadar and the only airdrop-related dApp among the top 100 dApps as of 19 February 2019. With the join of this DApp, Infinito Wallet's users are now gifted with EOS candies everyday or even every hour. To be specific, the amount of EOS airdrops users can get daily varies in accordance with their account's level. To heighten level, wallet owners can deposit EPRA token - PRA CandyBox's proprietary token - into their account. This means the more EPRA token users deposit, the more EOS candies and the shorter duration for them. Level 1 accounts are those with less than 1,000 EPRAs, can repeatedly claim tokens every four hours. While top accounts like level 12 are rewarded with up to 12 airdrops every hour. Users can find this DApp inside Infinito App Square, displayed as "Browser" in the Universal Wallet. Convenience is one highlight of this EOS token distribution as PRA CandyBox keeps their airdrop "game" extremely simple. To receive candies, Infinito Wallet's users simply need to click on the airdrop project, input password and tap "confirm". That's it!*Please note that you must own an EOS account ...Full story available on Benzinga.com
Benzinga

Why Square’s Bitcoin Hiring Spree is Crucial for Crypto Adoption

Jack Dorsey, the CEO of Square, the $32.7 billion mobile payment giant based in the U.S., revealed that Square would fund three to four developers and a designer to work on the open-source protocol of Bitcoin and the crypto ecosystem. Independent of the core business strategies of Square, the team of developers and a designer will work to contribute to the cryptocurrency ecosystem in a variety of ways, potentially by contributing to the open-source codebase of the Bitcoin network. #BitcoinTwitter and #CryptoTwitter! Square is hiring 3-4 crypto engineers and 1 designer to work full-time on open source contributions to the The post Why Square’s Bitcoin Hiring Spree is Crucial for Crypto Adoption appeared first on CCN
CCN

Square is Hiring: You Can Be Paid in Bitcoin if You Want

Twitter and Square founder Jack Dorsey has always been bullish in his Bitcoin views. So it’s no surprise that his payments startup Square is now offering new employees the chance to be paid in Bitcoin. According to tweets from the CEO, the company is on the hunt for skilled labor to add to the team. Square Bitcoin Payments If Dorsey’s tweets are anything to go by, then the company is hiring engineers and a designer to “work full-time on open source contributions to the bitcoin/crypto ecosystem.”  The Square cash app already supports Bitcoin purchases ... ﾿ Read The Full Article On CryptoCurrencyNews.com Get latest cryptocurrency news on bitcoin, ethereum, initial coin offerings, ICOs, ethereum and all other cryptocurrencies. Learn How to trade on cryptocurrency exchanges. All content provided by Crypto Currency News is subject to our Terms Of Use and Disclaimer.
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