SEC Now more Interested on Cryptocurrency Investment Advisors
The US Security and Exchange commision is shifting its major focus in the cryptocurrency on crypto investment advisors. In the United States, any Hedge Fund manager controlling more than $100 million is directly controlled by the SEC. SEC now wants to know how these cryptocurrency hedge funds store cryptocurrency. Additionally, the commission is investigating any possibilities of price manipulation and cybersecurity issues.
We have seen over time how vulnerable cryptocurrencies are to hackers and malicious users. So far billions of dollars worth of cryptocurrencies have been losing to this vice. Although the most expensive hacks targeted cryptocurrency exchanges, SEC thinks hedge funds are also at risk. The commision wants to know how these advisors store their clients’ money and how the security of the tokens get assurity.
Meanwhile, the previous direction of the SEC regulation majorly focused on ICOs. The commission tried to sweep out possibly fraudulent ICOs and scammers. For a long time, the commision embattles with the debate of whether digital tokens should come under securities or not.
SEC is implementing a Strict Guidelines for cryptocurrency companies
For a long time, the commission has maintained a strict guideline for firms and venture capitalist in the cryptocurrency space. Last month SEC closed a firm known as 1pool which was selling unregistered securities. Another firm TokenLot also shuts down during the same period after the opening of an ICO superstore. Just recently SEC identified and shut down Blockvest fundraising after the company falsely claimed it had an SEC license.
SEC is concern about possible price manipulation within the cryptocurrency industry. The regular turned down every attempt by many companies to trade exchange-traded funds based on Bitcoin futures. Early this year, SEC ordered a series of cryptocurrency exchanges under its jurisdiction to give a witness summon regarding price manipulation.
The new approach SEC is taking seems to be in line with a report of a private research firm which indicated that there were over 212 cryptocurrency hedge funds as of June 2018. The report added that more new hedge funds are popping up all the time. These hedge funds are especially for big money investors interests in cryptocurrency.
On the other hand, most American investors don’t worry about the stringent rule of engagement SEC puts across. Many investors want to be sure they are not being coned off their hard earned money.
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