In a letter recently made public, Securities and Exchange Commission Chairman Jay Clayton endorsed analysis advanced by the SEC's director of corporate finance, William Hinman, in a 2018 speech stating the view that ether is not a security. Citing to the Howey framework, Chairman Clayton, in response to a letter from U.S. House Representative Ted Budd, indicated that where purchasers no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts, a digital asset may not represent an investment contract. According to a recent announcement on the SEC's FinHub website, the SEC is also looking to establish stronger working relationships with the cryptocurrency and wider fintech community through local peer-to-peer meetups and a new online portal, hosted by FinHub, where interested attendees can report general areas of interest or a specific inquiry, including "determination of instrument as a 'security.'"
Last week, Thailand's SEC approved the first ICO portal, with the first public ICO reported to be conducted under digital asset royal decree to follow in the near future. The Thai SEC is also working to issue criteria that will allow companies to conduct STOs in Thailand. In Malta, the Malta Financial Services Authority (MFSA) recently appointed blockchain forensics firm CipherTrace to oversee regulatory processes and conduct risk management audits of virtual asset businesses, following recommendations from the IMF that MFSA take immediate action to close gaps in AML and CFT oversight.
Cryptocurrency schemes continue to see strong action from law enforcement and regulators, with the Commodity Futures Trading Commission (CFTC) announcing a Consent Order with Marshall Islands-based 1pool Ltd. The company was required to pay $990,000 to resolve claims that 1pool illegally offered retail commodity transactions margined in bitcoin, failed to register as a futures commission merchant (FCM) and failed to meet supervisory duties. Also last week, a joint investigation involving the U.S. Attorney's Office for the Southern District of New York, the New York District Attorney, the Internal Revenue Service-Criminal Investigation (IRS-CI) unit and the FBI resulted in the arrest of Konstantin Ignatov on wire fraud charges for his role with OneCoin, which authorities are calling a multibillion-dollar pyramid scheme involving cryptocurrency.
For more information, please check out the following links:
- SEC Chairman Clayton just confirmed Commission staff analysis that found Ethereum (and cryptos like it) are not securities
- SEC Jay Clayton Letter of March 7 2019
- US SEC's Finhub Launches Series of Meetups to With Crypto, Fintech Communities
- Local P2P with SEC FinHub
- Thai SEC approves first ICO portal, still unnamed
- Maltese Financial Regulator Appoints CipherTrace to Monitor Compliance in Crypto Firms
- Manhattan U.S. Attorney Announces Charges Against Leaders Of "OneCoin," A Multibillion-Dollar Pyramid Scheme Involving The Sale Of A Fraudulent Cryptocurrency
- Foreign Trading Platform and Its CEO to Pay $990,000 for Illegal Bitcoin-Related Transactions with U.S. Customers
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