The regulatory bodies of every nation have been in critics for hindering the innovative approach. While the crypto industry is flourishing at its pace the regulators are also concerned as they believe the new technology needs to be regulated so no one is manipulating the industry and playing it unfairly.
United States regulating bodies the Financial Industry Regulatory Authority (FINRA) and it’s ruling organization the Securities and Exchange Commission (SEC) recently reported filing objections against non-compliant crypto players who made some false statements regarding their businesses.
FINRA is a private, non-federal agency, and is regulated by the SEC. It regulates one specific part of the securities industry in the U.S.: brokerage firms doing business with the public.
FINRA has filed a complaint against a citizen from Massachusetts, Timothy Tilton Ayre. The agency charged him with securities fraud and the illegal distribution of an unregistered cryptocurrency called HempCoin (HMP) which is different from the company with a similar name that trades THC tokens.
The agency states that Ayre’s claims were “fraudulent, positive statements about RMTN’s business and finances.” As Ayre never attempted to register the coin, FINRA chose to charge the RMTN president with the unlawful distribution of an unregistered security.
FINRA convinced that anyone named in its complaint can file a response and request a hearing. The agency will dig for the violations and if confirmed, Ayre might face a fine, censure, suspension or be barred from the securities industry altogether.
SEC also issued a separate case and desist orders along with fines. SEC filed against Crypto Asset Management (CAM) fund and its founder Timothy Enneking, who reportedly presented CAM as the “first regulated crypto asset fund in the United States.” CAM raised $3.6 million from 44 investors in late 2017, bringing its net asset value to $37 million.
After the SEC violated the fraud, CAM agreed to stop its public offering and offered a buyback to investors and also agreed to pay the $200,000 fine but did not deny or admit guilt to the allegations.
The U.S. regulatory bodies have actively focused on the crypto market. Interestingly, FINRA has reportedly never issued any disciplinary action within the crypto industry until now. The SEC had also publicly addressed crypto hedge funds in an apparent first as well.
From the results of Autonomous NEXT research, there were more than 226 funds managing digital assets who controlled at least a combined $3.5 billion, as of February 2018. The SEC took the attention in March 2018 it was reported that the agency sent a number of requests to crypto focused funds regarding their compliance and issued subpoenas for few.
Bill Huizenga, the lawmaker, in his speech in July argued that Congress should empower financial regulators such as the SEC to regulate the cryptocurrency market in compliance with the same rules governing other currencies and stocks. The U.S. regulatory bodies still haven’t come up with one definitive scheme to regulate the crypto industry, as private agencies continue to approach them differently, depending on their competence.
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