The Strategist

SEC to deal with crypto-currency funds

12/12/2017 - 14:16

The Securities and Exchange Commission of the United States (SEC) may turn its attention to funds that intend to keep their crypto-currency assets on their accounts, CoinDesk writes.

The authority, overseeing investment activities in the United States, is going to solve issues related to the regulation of companies holding or investing in digital assets, said Dalia Blass, head of investment management at SEC, speaking at the ICI Securities Law Developments conference in Washington.

"We continue to consider potential innovations in investment management, including investment funds, whose activities are focused on digital assets." As with any new product, the operations of these organizations raise some questions," Blass said, referring to the process of creating the relevant regulatory and legal framework base and structures for the regulation of basic assets.

The Comission is interested, among other things, how in this case it is possible to distinguish one asset from another and how to understand that potential investors are duly informed about possible risks. "How will these funds fit into the existing regulatory framework? Which regulatory structure or structures should be applied to the markets of their basic instruments? We will discuss these issues in the process of consideration of applications," she added.

Thus, the SEC can take another step on the way to regulating the scope of the blockchain and crypto-currency. Earlier, the Commission accused ICO organizers DRC World and REcoin of fraud, and later the new cyber-division SEC filed a lawsuit against ICO of PlexCoin.

SEC accused the founder of PlexCorps Dominic Lacroix and his partner Sabrina Paradis-Royer in a fraudulent scheme. The partners promised to buyers of PlexCoin’s tokens a profit of 1354% for 29 days.

They were accused of violating the securities laws, to which crypto-currencies are subject in the country. On the basis of the court's decision, SEC blocked the company's assets.

The accusation was the first case of the cyber division of the commission, established in September 2017. Its head said in a statement that the violation of PlexCorps is a typical crime that the regulator will pursue. The SEC said they had to "act quickly to protect private investors from the false promises of the creators of PlexCoin."

PlexCoin positioned itself as a new decentralized crypto currency based on Ethereum, but at the official start-up site you can find only common words and vague promises, without any specifics and explanations of what PlexCoin is and why it is needed.

Nevertheless, in August 2017 the company successfully launched the ICO and, according to the SEC, managed to collect more than $ 15 million from thousands of investors. The company promised to spend all the proceeds from the ICO funds on "software development", because the project, according to its official website, is operated by an international team of experts.