Bitcoins are gaining popularity across the globe, but they are also attracting the attention of the U.S. Securities and Exchange Commission. The SEC has handed down subpoenas to cryptocurrency projects like TechCrunch. According to Bitcoinist, the $100 million cryptofund is now under investigation. The investigation hints at the overall trepidation of governments around the world toward the cryptocurrency exchange.According to the site, TechCrunch founder Michael Arrington and his cryptocurrency fund have been subpoenaed, but Arrington says they aren’t the only company to come under investigation.He told CNBC on Thursday, “We received a subpoena. Every [crypto]fund I’ve talked to has received one. That’s fine. They just have to figure out what they want. They need to set up rules so we can all follow them, and the market is begging them for that.”Ā
Just what the SEC is looking for seems to be a mystery. In the past, the commission has indicated that regulations in regards to securities laws do not apply to digital coins. The confusion is appearing to have a domino effect as cryptocurrency firms ban U.S. investors from projects, seemingly worried about further scrutiny. What is clear is that there is a nation-wide investigation through the SEC’s New York, Boston, and San Francisco which have issued multiple subpoenas, in “an attempt to learn as much as possible” about the fast-growing billion-dollar industry. The multiple investigations are leading those in the industry to believe it’s a coordinated and wide-reaching investigation
The US is not the only country trying to leverage a certain amount of control over the cryptocurrency business. According to the article, South Korea still has mass confusion over the entire process, while China has banned Initial Coin Offerings and European financial authorities are calling for an all-out stop to cryptocurrency investments. Why are countries so concerned? Well it’s the very nature of cryptocurrency itself. Cryptocurrency transactions are encrypted. They can be tracked to a certain extent, but they provided a way to keep money and transactions secretive and out of sight for regulators.There is a certain risk the funds could be used to fund criminal activity or terrorism. Plus, they can be used to circumvent capital controls as companies investing in cryptocurrency could avoid taxes, penalties, and even possible seizure if a government suspects wrong doing.
Another reason it seems to be making international governments antsy is the fact that it is not really a legal tender of any nation. There is no institution behind it and it’s hard to determine the exact value from country to country.
Currency of The Future?
Japan is one few countries that has successfully implemented a licensing system for cryptocurrency exchanges. Russia is also looking into how to properly regulate their exchanges. While the U.S. is not alone in figuring out the future of the cryptocurrency landscape, the worry is the American market may get left behind countries like Japan. Many in the community agree that cryptocurrency investments need rules and regulations just not back-and-forth investigations.
To learn more or report suspected fraud, contact Jeff Newman Law
