The Security and Exchange Comission have been visibly taking action against crypto firms for alleged security violations, including today asking a US district court to enforce their subpoena against the Saint James Holding and Investment Company Trust, ran by Jeffre James, for what it claims was a fraudulent $100,000,000 ICO named Cherubim.
The SEC has made a number of moves against specific crypto entities, including, among others, charging crypto broker 1Broker and Michael Arrington’s XRP Capital Fund, who himself came out against the SEC last week at the Global Blockchain Forum for their increased tendency to ‘subpoena first and ask questions later.’
According to Coinreport the SEC is moving against ventures which it has already sanctioned while issuing new subpoenas, seemingly corroborating claims made by Arrington that many people in the crypto space are being issued citations by the SEC, but are afraid to come forward and make them public.
One of the most prominent moves by the regulatory body came yesterday, when the SEC asked a district court to enforce a subpoena previously released against the crypto entity Cherubim alleging that their $100 million ICO was a pump-and-dump, and describing the Cherubim as a ‘penny-stock company.’ Central to the allegations is the firm's SJTcoin, which the SEC is contending was utilized to fraudulently bolster Cherubim, whereafter ‘certain individuals associated with the company may have 'dumped' their overvalued Cherubim stock for significant profits.’
Despite the fears of many in the #cryptocurrency community, the #SEC has acted in a thoughtful and responsible way as it looks to regulate #digitalassets. Our comprehensive overview of their positions on current #crypto issues. https://t.co/pYev9trNjf— ℭsilla 𝔅rimer (@CryptoTweetie) October 10, 2018
It’s difficult to argue that scams don't abound in the crypto space, with reports noting that in 2017 $1 Billion were raised by ICO scams. Nonetheless, legitimate crypto enterprises suffer from any regulatory scrutiny, and thus it is in crypto developers' best interest to reduce the amount of policing that the SEC does, and thus reduce regulatory overhead. Sweden is moving forward with self-policing structures, while Ripple is cozying up to lawmakers in the hope of simultaneously pushing through friendly regulatory frameworks while as ensuring that they themselves are compliant with existing laws.
It's activities like these that invite the SEC to overregulate the crypto space. We need to self regulate. #BoycottYobit— #Bittrekt (@RobertF17396727) October 10, 2018
Whatever the regulatory future looks like, the SEC looms large over it, and the players who can navigate the legal realities of crypto in 2019 will have a distinct advantage.