The US financial regulator (SEC) is attacking providers of crypto currencies and other forms of crypto assets. According to the watchdog, any provider of forms of crypto may be acting in violation of US law.
In a statement, the SEC equates offering crypto currency with offering securities, such as shares. This requires a license under US law. The regulator also states that ‘unregistered offers in crypto’ may not provide the ‘important information’ to make an informed choice with an investment. That would be against the law.
It was previously announced that several celebrities have reached a settlement of hundreds of thousands due to a lack of transparency in the promotion of crypto tokens such as Tronix and BitTorrent.
Aligned with providers of shares
The watchdog has also issued an official “investor warning” for crypto assets with the rulings. The SEC also announces that providers of cryptocurrencies will be put on an equal footing with providers of stocks and other investment funds. Providers therefore need a license to offer crypto assets. In addition, the watchdog emphasizes that no cryptocurrency provider is currently registered with the SEC, unlike, for example, the New York Stock Exchange and the Nasdaq Stock Market, which offer shares.
Liquidity
In particular, the financial regulator has criticized the liquidity that some cryptocurrency providers have. The SEC states that the providers “may not provide assurance that there are enough assets.” This means that crypto exchanges may have too little collateral for the assets outstanding of customers.
It is still unclear whether there will be actual consequences for providers of crypto. One of the world’s largest crypto providers, Coinbase, is already under watchdog scrutiny. The regulator suspects the stock exchange of multiple violations and is inclined to take measures.
