📈 The U.S. Securities and Exchange Commission’s (SEC) approach to cryptocurrency is aimed at informing investors of potential risks and reducing digital asset volatility 🌐. Despite this, some traders are not pleased with the SEC’s involvement in the crypto sphere. Cryptocurrencies, powered by blockchain technology, have key features such as decentralization, transparency, and independence 💻. However, the crypto market is highly volatile, necessitating careful investment planning.
🏛 The SEC, established after the 1929 stock market crash, is responsible for ensuring investor fairness and punishing financial misconduct. Lately, the SEC has shown interest in cryptocurrencies, categorizing them as potential securities. According to SEC’s Chair, Gary Gensler, most cryptocurrency products meet the criteria of the Howey Test and the Reves Test and qualify as securities under federal laws.
⚖ In recent years, the SEC has initiated legal actions against several major cryptocurrency firms, including BlockFi Lending LLC, Kik Interactive Inc, Coinbase, and Ripple Labs. BlockFi was fined $100 million, Kik Interactive was penalized $5 million, and lawsuits were filed against Coinbase and Ripple Labs over unregistered securities offerings 🚨. While Ripple Labs won its case, it was discovered that $728.9 million of its XRP tokens were sold to sophisticated buyers.
🔍 Some criticisms of SEC’s crypto regulations include alleged irregularities and the lack of a comprehensive framework. While regulations seem inevitable, they may help curb cyber scams, making the crypto sphere safer and more acceptable, especially in the U.S. 🇺🇸.
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