The Collective
Dec 17, 2018 · 3 min read

The Securities and Exchange Commission (SEC) plays a pivotal role in enforcing federal securities laws and the oversight of the securities markets and those that participate in them; which of course includes crypto currencies.

The mission of the SEC is to protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation. The SEC oversees:

● Securities trading on U.S. equity markets (around $75 trillion traded annually)

● The disclosures of approximately 4,100 exchange-listed public companies (aggregate market capitalization of $31 trillion)

● The activities of over 26,000 registered entities and self-regulatory organizations, including investment advisers, broker-dealers, transfer agents, securities exchanges, clearing agencies, mutual funds, exchange-traded funds (ETFs), the Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board (MSRB)

As you can see from the above, the SEC has a very large reach but has recently hit the crypto spotlight because of their decisions over ETFs and a number of rulings involving Initial Coin Offerings (ICOs).

The SEC have recently either rejected or delayed decisions on ETFs due to concerns that the companies are not meeting the requirements to prevent fraudulent and manipulative acts and practices. The SEC also raised concerns about the size of the Bitcoin ETF market stating there is unease that the exchanges won’t be able to ensure that participants will be protected from market manipulation.

While not all might agree, the points made by the SEC are not to be ignored. Indeed there are many companies and start-ups embracing regulation by implementing regulatory practices such as Know Your Customer (KYC) and Anti Money Laundering (AML).

More recently, the SEC turned their attention to the ICO market, imposing $250,000 fines on ICO operators Paragon and Airfox, which together raised $27 million in 2017. Both companies must also pay back million to the ICO investors as mandated by the SEC.

In a statement, the SEC stated:

“We wish to emphasize that market participants must still adhere to our well-established and well-functioning federal securities law framework when dealing with technological innovations, regardless of whether the securities are issued in certificated form or using new technologies, such as blockchain,”

The ETF sanctions news has brought about mixed reactions. Some within the crypto market believe that a more stringent regulatory framework is required if blockchain technology is to thrive. Others feel that more needs to be done to clarify this increasingly murky market so that legitimate companies within the ICO space can operate without fear of reprieve.

A similar case has just been settled by the Californian court but this time with an unexpected twist.

A temporary restraining order was placed on Reginald Buddy Ringgold’s company, Blockvest LLC following a complaint filed by the SEC against a number of rules of the Securities Act 1993. The SEC alleged that Blockvest had been offering and selling unregistered securities in the form of digital assets called BLVs but all allegations were denied by Californian District judge, the Honourable Gonzalo P Curiel on the 27th of November 2018. The full court report can be found here:


The implications of this court case are far reaching. They set a precedent not only for other ICOs but for the SEC themselves. The balance between justice, enforcement, and fair trade is delicate, but in order for crypto assets, and ICOs in particular, to continue their growth, clear lines need to be drawn.

The CollectiveGo

Professional Community Management and Development For ICO Projects & Cryptocurrencies

The Collective

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We are a highly responsive team of independent contributors who can deliver a broad range of content and community support during your ICO.

The CollectiveGo

Professional Community Management and Development For ICO Projects & Cryptocurrencies

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