The Securities and Exchange Commission (SEC) was established in 1929 as the first federal regulatory authority of the US securities market.. The purpose of the SEC is to protect investors, to make fair, orderly and efficient markets, and to facilitate capital formation.
SEC’s decisions have a significant impact on the crypto industry
First of all, the SEC is committed to ensuring that securities are traded. It focuses on dealing with their offerings and sales, regulating the exchanges on which they are traded, ensuring that companies do not disclose misleading information about their performance or future prospects, and that investors are protected from fraud. It is seen that it affects the prices of digital currencies by shifting to the field. The SEC has become a regular topic in the daily cryptocurrency news cycle.. The decisions of the SEC, which regulates whether digital currencies are securities, new products or exchanges, have a significant impact on the cryptocurrency industry.
Here is the SEC’s cryptocurrency. In today’s article, we’ll cover the latest SEC cryptocurrency decisions and the SEC’s actions regarding the cryptocurrency market.
SEC Chairman: “Bitcoin is not a security! ”
At a hearing before the Housing Appropriations Committee in April, SEC Chairman Jay Clayton explained the commission’s stance on the status of Bitcoin.. The SEC Chairman made the following statement on the subject:
This is a complex industry. Because, as you said, there are different types of crypto assets. Let me try to divide them into two zones. The most frequently cited pure medium of exchange is Bitcoin. It has been determined that the cryptocurrency does not fall into the securities status specified by most people.
Jay Clayton continues his explanation by explaining whether tokens are securities and says:
Then there are tokens used to fund projects. I found records that say very few are securities.. There is nothing I see, there are tokens that are not securities. To the extent that something has the characteristics of a security, we should issue it as a security.. Also, our securities regulations are disclosure-based, and people must track them and provide the information we need.
It is clear that Bitcoin is not yet recognized as a security, according to the SEC Chairperson’s statement.
William Hinman: “Ether is not a security!”
In June, the world’s third most popular cryptocurrency was officially declared not an investment vehicle by the Securities and Exchange Commission. William Hinman, director of the SEC’s corporate finance division, stated that Ether is not a security.. The SEC official emphasizes that Ether’s status is not the same as stocks and bonds, so it should not be subject to securities regulations.
DAO designated as illegal securities
SEC, 2017 In July, it announced that DAO tokens offered through an ICO that raised more than $150 million in 2016 will be considered securities. This SEC statement was later followed by a Senate hearing in February, where SEC Chairman Jay Clayton said, “I believe every ICO I see is a security.” It was illegal as the tokens were not registered with the SEC prior to the token sale. This decision didn’t just affect the DAO. The consequences of this decision showed that many ICOs may face legal problems in the future as well.. SEC filed no charges at the time of decision. But it has effectively changed the way the ICO scene unfolds.. The ICO market was allowed to run without any regulation for months until then.
Although the cryptocurrency community reacted negatively to the announcement, the overall impact on the market was negligible. According to sources, the first five cryptocurrencies experienced a price drop in the day of the announcement, but after that they bounced back quite quickly and entered an uptrend.
Winklevoss brothers’ Bitcoin ETF application was rejected
In July 2018, the SEC also rejected the Winklevoss brothers’ second attempts to launch a Bitcoin ETF. On July 26, the SEC ruled that the Winklevoss brothers’ claim that the Bitcoin markets are “inherently resistant to manipulation” is untrue and rejected their proposal for a Bitcoin ETF for these reasons. ‘rejection’ prompted a quick negative response. BTC has lost over $400 in just 3 hours. As usual, if Bitcoin drops, other coins follow the trend. However, Bitcoin, the number one cryptocurrency by market cap, regained its value within 24 hours.
Everyone is waiting for the SEC’s Bitcoin ETF decision to take place in 2019
August 7 The US Securities and Exchange Commission (SEC) announced that it has delayed its decision on the approval or disapproval of a rule change proposal that would allow the CBOE BZX Exchange to list Bitcoin ETFs. rejected nine Bitcoin ETF offers in three separate orders. Now, the next deadline for approval of the ETF has moved again towards the end of December, but ultimately everyone expects the decision to take place in 2019.
VanEck and SolidX Bitcoin ETF application rejected
In June 2018, VanEck and SolidX applied for a physically backed Bitcoin ETF to be listed on the CBOE’s BZX Stock Exchange and were awaiting a decision in August. As with other ETF decisions, the SEC has also delayed its announcement regarding the VanEck and SolidX ETF offerings.
As we mentioned earlier, the SEC’s decision deeply affects the market.. Ripple loses more than 20 percent of its value due to the controversy over whether XRP is a security. Interestingly, the news about VanEck and SolidX ETF offers are neither positive nor negative. Unlike the Winklevoss ETF, this is not a rejection for VanEck and SolidX’s product. Instead, the SEC only announced that the decision would be delayed. Still, it received a strong response from the markets.
SEC and CFTC recognize cryptocurrencies jointly
An example that does not follow the trend, although most of the SEC’s actions led to crypto prices falling there is. In February 2018, a joint hearing was held by the SEC and the US Commodity Futures Trading Commission (CFTC) examining the topic of cryptocurrencies, ICOs and Blockchain technology. acknowledging the need for fair regulatory frameworks to ensure its long-term success. Regulators also stated that “without Bitcoin, there would be no Blockchain”. The market’s reaction to this statement turned into a strong uptrend. China and India acted to crash the cryptocurrency industry and markets were entering a declining trajectory. Both BTC and ETH experienced an increase of nearly 20 percent in the days following the hearing.
Conclusion
The SEC’s significant administrative change in the cryptocurrency industry. It is also clear that the regulations and announcements they make have an immediate impact, reaching beyond the US borders and into the global cryptocurrency markets.. Therefore, do not forget to follow Crypto Koin to be informed about all developments regarding the SEC!