SEC (Securities and Exchange Commission)
The Securities and Exchange Commission (SEC) is a U.S. government agency that regulates the securities markets, including cryptocurrencies such as Bitcoin and Ethereum. The SEC was established by Congress in 1934 to protect investors from fraudulent activities in the stock market, and has since been expanded to include oversight of other financial instruments like derivatives and commodities. In addition, the SEC is responsible for enforcing federal securities laws that govern public companies’ disclosure practices, insider trading regulations, takeover rules, mutual fund governance standards, accounting requirements for publicly-traded companies and more.
In recent years the SEC has started investigating cryptocurrency projects with potential security violations as well as Initial Coin Offerings (ICOs). They have also issued warnings about potential scams related to investments involving digital currencies or ICOs. As part of their efforts they have set up an Investor Alert page which offers information on common frauds associated with cryptocurrencies or ICOs along with advice on how to evaluate these investments before investing any money into them. This page can be found at www.sec.gov/investor-alerts .
For those looking to register a cryptocurrency project with the SEC there are several steps one must follow: 1) filing a Form D; 2) registering as a broker-dealer; 3) filing Regulation A+ or Regulation CF forms; 4) providing audited financial statements; 5) disclosing significant risks related to investment in your project; 6 ) setting up AML procedures; 7 ) submitting KYC documentation ; 8 ) obtaining approval from FINRA ; 9 ) setting up investor relations programs ; 10 ) adhering to ongoing reporting requirements .
It is important for anyone planning on offering tokens via an ICO or seeking registration of any type of security with the SEC understand all applicable laws relating thereto before proceeding further . Failure to comply could result in civil penalties being imposed upon both issuers & promoters , major fines , suspension from associating w/broker dealers & even criminal prosecution . It’s always best practice when dealing w/the US regulatory authorities such as the SEC that you consult legal counsel prior taking action .
