SEC launches probe into cryptocurrency firms


DAVID: CRACKING DOWN ON CRYPTO. THE SEC LOOKING INTO DOZENS OF COMPANIES INVOLVED IN CRYPTOCURRENCY TRADING, COMPANIES RAISING MONEY USING NEW FORM OF DIGITAL CASH. HILLARY VAUGHN SAT DOWN WITH THE HEAD OF THE SEC IN A FOX BUSINESS EXCLUSIVE. SHE HAS THE REPORT. HILLARY, GOOD TO SEE YOU. REPORTER: BITCOIN OFFERINGS ARE BIGGER THAN EVER AND THE CHAIR OF THE SEC HAS HIS EYE ON THEM. I SAT DOWN WITH CHAIRMAN CLAYTON. THEY ARE LOOKING AT SEVERAL ICOs TO MAKE SURE THEY ARE NOT VIOLATING SECURITIES LAWS. HE SAID ICOs ARE SECURITIES, POSING AS ICO AND SHOULD FOLLOW UNDER SEC JURISDICTION.>>FOR SOME REASON, PEOPLE SELLING ICOs SEEM TO THINK THEY DON’T NEED TO FOLLOW EITHER PATH. THEY SEEM TO THINK THEY CAN HAVE THE BEST OF BOTH WORLDS A LIMITED DISCLOSURE FROM A PRIVATE PLACEMENT AND PUBLIC TRADING AND PUBLIC OFFERING OF THE TOKEN. ABIDE BY THE LAW. WE’RE WATCHING. OTHERS ARE WATCHING. REPORTER: TELEGRAMMING ENCRYPTED MESSAGING APP COMPANY BROKEN THE RECORD FOR BIGGEST ICO CAMPAIGN OF ALL TIME. THEY HAVE RAISED OVER $850 MILLION IN THE FIRST TWO MONTHS OF FUND-RAISING OUT OF WHAT IS EXPECTED TO BE A TWO BILLION DOLLAR ICO. CRITICS SAY SOME COMPANIES ARE EXPLOITING ICOs AS QUICK CASH CAMPAIGN TO PAY BILLS WITH NO GARRITIES FOR INVESTORS.>>WE’VE SEEN INSTANCES WHERE COMPANIES SEEM TO HAVE TROUBLE RAISING MONEY IN A TRADITIONAL PRIVATE PLACEMENT AND THEN HAVE SWITCHED TO AN ICO IN ORDER TO RAISE THE MONEY. THE BUSINESS HASN’T CHANGED SUBSTANTIVELY BUT IT IS A FORM OVER SUBSTANCE WAY TO RAISE MONEY. THAT IS TROUBLING. REPORTER: SO THE INITIAL COIN OFFERING IS WHEN A COMPANY SELLS A TOKEN INSTEAD OF A STOCK TO AN INVESTOR THAT IS LOOKING FOR A RETURN ON THAT BUT IT IS NOT REGULATED BY THE SEC WHICH IS CAUSING SOME CONCERN. CLAYTON TELLS ME THE SEC IS DEVOTE AL SIGNIFICANT AMOUNT OF RESOURCES TO THIS CRACKDOWN BECAUSE MAIN STREET INVESTORS ARE AT RISK. HE WORRIES THAT INVESTORS COULD BE EASILY TRICKED BY THESE ICO LISTINGS LOOK LIKE THEY’RE LISTED ON THE NEW YORK STOCK EXCHANGE AND THINK THEIR TOKEN INVESTMENT THEY’RE PURCHASE SOMETHING PROTECTED LIKE A SHARE OF STOCK WHEN IT’S NOT. DAVID? DAVID: A LOT OF CRYPTOCURRENCY OWNERS ARE A LITTLE WARY OF THE

5 thoughts on “SEC launches probe into cryptocurrency firms”

  1. It's only a matter of time before they crack down on cryptos and start regulating the issuers and exchanges like banks and stock brokers. They're mostly useful for money laundering, tax evasion and Ponzi schemes, and those things cannot be allowed to continue.

  2. Added regulation can only be good for the crypto space lending credibility to what once was a means to purchase illegal contraband on the black market.

  3. This has nothing to do about the actual crypto coins themselves. Much Ado About Nothing. Just will have no impact at all on the crypto Market

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