The US SEC and Crypto Regulations

The US SEC and Crypto Regulations

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This year, on April 3, the United States Securities and Exchange Commission released new cryptocurrency regulatory guidance. In the document, it is thoroughly explained which crypto coins would be considered as securities by the United States.

The news of fresh crypto regulations was announced last November by William Hinman, the Director of the Division of Corporation Finance. Other members of SEC also agreed to this statement claiming that the agency was working on the document.

The SEC has greatly contributed to forming the crypto laws in the country. The agency took great measures to ensure the creation of comprehensive crypto regulations. 

Yet, it can be concluded that not everything about crypto regulations and their application is clear.

Finance Magnates, a multi-asset trading knowledge hub, interviewed a securities lawyer to understand the impact of SEC regulations on investors and token issuers as well as how to navigate the market.

The previously mentioned securities lawyer, Samuel Katz is a lawyer and a general counselor for a blockchain startup. He is specialized in United States Securities law, venture capital and digital tokens. 

Katz declared that crypto coins that will be classified as securities by the United States Securities and Exchange Commission are far more than most crypto investors believe it is.

“The thing that crypto traders should know is that in the United States, most tokens, with the exception of Bitcoin (BTC) and Ethereum (ETH), will most likely fall under the securities category.”

“Consequently, these crypto coins become objected to US securities laws that regulate everything from ICOs to securities. Other crypto coins like stablecoins will probably be regulated through other laws.”

When asked what tokens are actually considered as securities, Katz answered that even though the Securities and Exchange Commission explain their definition of securities, it can be summarized that those tokens that are going to gain profit for a small group of people are securities. 

Katz also mentioned that the Commission’s role in creating laws in the United States is quite limited since the actual laws are legislated by the United States Congress. The Securities and Exchange Commission’s job is to enforce the laws. In addition, the SEC has the ability to grant dispensation from the laws.

Since the Commission carries the responsibility of protecting US investors, it is very careful in its job of studying crypto coins. So when the SEC finds out about hack and frauds in the crypto industry it becomes worried about investors.

Another thing that the Securities and Exchange Commission takes interest in transparency. The United States laws do require disclosure and the SEC is trying to enforce the laws in the cryptocurrency market.

In the United States, companies and individual investors should discuss most things with an experienced lawyer, since some questions are still unanswered and unclear. Especially, dealing with asset-backed tokens can be a hassle, since it involves many legal questions. 

On the other hand, the SEC is also bringing many companies to court and the number is expected to grow. Hence, you should be very careful. SEC is going after exchanges, individuals and companies that will violate the United States securities laws.

If you already understand crypto regulations in the United States, you should also know how to monitor and manage your crypto portfolio. Crypto portfolio trackers are tools designed to make crypto investing easier for you. Don’t know how to you them? Check out this highly practical guide on cryptocurrency portfolio management.

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