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US SEC Shifts Focus to Crypto Investment Advisors

The US SEC is paying more attention to scrutinize the rapidly sprouting investment advisers working with cryptocurrencies.


SEC Now more Interested on Cryptocurrency Investment Advisors

The US Security and Exchange commision is shifting its major focus in the cryptocurrency on crypto investment advisors. In the United States, any Hedge Fund manager controlling more than $100 million is directly controlled by the SEC. SEC now wants to know how these cryptocurrency hedge funds store cryptocurrency. Additionally, the commission is investigating any possibilities of price manipulation and cybersecurity issues.


We have seen over time how vulnerable cryptocurrencies are to hackers and malicious users. So far billions of dollars worth of cryptocurrencies have been losing to this vice. Although the most expensive hacks targeted cryptocurrency exchanges, SEC thinks hedge funds are also at risk. The commision wants to know how these advisors store their clients’ money and how the security of the tokens get assurity.

Meanwhile, the previous direction of the SEC regulation majorly focused on ICOs. The commission tried to sweep out possibly fraudulent ICOs and scammers. For a long time, the commision embattles with the debate of whether digital tokens should come under securities or not.

SEC is implementing a Strict Guidelines for cryptocurrency companies

For a long time, the commission has maintained a strict guideline for firms and venture capitalist in the cryptocurrency space. Last month SEC closed a firm known as 1pool which was selling unregistered securities. Another firm TokenLot also shuts down during the same period after the opening of an ICO superstore. Just recently SEC identified and shut down Blockvest fundraising after the company falsely claimed it had an SEC license.

SEC is concern about possible price manipulation within the cryptocurrency industry. The regular turned down every attempt by many companies to trade exchange-traded funds based on Bitcoin futures. Early this year, SEC ordered a series of cryptocurrency exchanges under its jurisdiction to give a witness summon regarding price manipulation.

The new approach SEC is taking seems to be in line with a report of a private research firm which indicated that there were over 212 cryptocurrency hedge funds as of June 2018. The report added that more new hedge funds are popping up all the time. These hedge funds are especially for big money investors interests in cryptocurrency.

On the other hand, most American investors don’t worry about the stringent rule of engagement SEC puts across. Many investors want to be sure they are not being coned off their hard earned money.

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Disclaimer : The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of Coinpedia. Every investment and trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Jacob Okonya

Jacob has been engaged in blockchain technologies, Bitcoin, and fintech. He worked mostly as a blockchain market researcher, fintech journalist, and online forum moderator. Jacob is involved in creating articles and educational content for different project components, explaining how users can utilize the various resources.

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