SEC And The Cryptocurrency Probe



and it talked more on the SEC and its decision to probe the crypto currency markets we're joined by Boris LEF ski brokerage operations specialists that Interactive Brokers sorry he used to be with ISI I see the International Securities Exchange and a member of the and which was owned by the Deutsche börse a group and he's currently a board member at the nodal exchange Boris thank you for being sorry I did that I'm using a back in the day thing I appreciate you being with us tell us about this SEC investigation what do we know so I think everyone's heard by now that yesterday the SEC sent out 80 subpoenas to various ICO firms and included as it turned out at least one publicly traded firm and that's overstock.com and their teaser operation and it really indicates a heightened scrutiny of these recent initial coin offerings so when these things happen and I know it I was involved in Italy supported it all the commissioners meet at the SEC in this instance but wouldn't be surprised if my former agency isn't doing the same thing and they agree on what their what subpoenas they're going to issue sometimes they give the director of enforcement the authority to do that by themselves most the time the commissioners on a big deal like this they're going to agree on every individual subpoena and the enforcement staff is going to tell them why they need to do that and they know that when this happens it's a it's not done in a vacuum it's gonna leak out like it has and as a the front page of the B section and the Journal today and across nationwide newspapers my imagination on this is that both the lawyers out there who are representing clients and the icos themselves are running pretty scared what do you think I think some of them are and this is really follow up after the CFTC and SEC chairman both met and testifying in front of the Senate Banking Committee I think a lot of people didn't expect to follow through this crackdown if you will to come so quickly but if you look back at what the SEC chairman Clayton specifically said it's not really that much of a surprise because he really made a point of saying all of these icos have to abide by these laws and I think we're seeing that now and I suspect that for the legitimate players this is fantastic news because it really creates and sees the beginning of a true regulatory framework and enforcement and it allow the real projects the true icos and real investment opportunities to be separated from the scams quite frankly yeah and and my guess is and you and I've spoken I I think on the air but you know I'm a supporter of the the crypto currencies and think they have a place in the future think blockchain is gonna change the world that said I don't want investors to get hoodwinked and my you know antenna tells me that what's going on here is that some of these quote initial coin offerings the icos are done in an inappropriate way they are what we called at the agency in bucket shops you want to explain for our viewers what a bucket shop is or basically weird expecting that one they're going I wasn't but but it's basically the idea of a group of people getting together locking in on a trend something hot like blockchain I SEOs and essentially finding the most vulnerable possible people and it's not always the older investors these days it's the younger investors in fact that gets so excited they're willing to buy almost anything they set up a website if they take the money whether it's cryptocurrency or real dollars and they disappear and what you've seen and have seen written about is that a lot of IPOs are defunct now what that really means is the project may have raised money and fail in other cases they raised money and disappeared and this is what you're starting to see people beginning to complain and the sec beginning to take actually you know it reminds me and this may be why former SEC Commissioner Dan Gallagher gave that that quote that I've used in the headline about the wolf of Wall Street or on steroids many people may remember that movie with Leonardo DiCaprio who he plays a Jordan Belfort who was the wolf of Wall Street and they had a bucket shop and it's all these people sitting on the phone dialing for dollars and they're they're going after anything I mean they're going after people's pension funds you know their college savings their health care funds it's really a shame so that's my guess where this investigation is headed today it's social media absolutely its Facebook it's Twitter it's being able to reach a much wider gullible audience unfortunately in some cases and you see this every day and I think it's it's good that the SEC is cracking down and the silver lining to all this is you are alluding to even though it's a scary circumstance now for some people but I'm glad they're doing it as a regulatory guy and I know you are too in that regard that ultimately this is the professionalization I think of the cryptocurrency universe there will be icos going forward but in the future they really do need to have some regulatory purview don't you think no absolutely and I think this is fantastic news for anyone out there who has done everything by the book hired the attorneys filled out the correct forms a dealt with the SEC filed their form these under regulation regulation reg D and is conducting a legitimate offering with a legitimate product I think this type of enforcement will like I said separate the legitimate players from the scammers always very helpful information appreciate your insights I know our viewers do too boy Philly s key thank you for joining us again always happen to be here barking

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