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How SEC is Taking Measures to Hurt the Overall Crypto Industry

The U.S. Securities and Exchange Commission (SEC) has in one way or the other led to certain setbacks in the cryptocurrency industry.

The U.S. Securities and Exchange Commission (SEC) has in one way or the other led to certain setbacks in the cryptocurrency industry. We’ll go ahead and spell it out, they have taken measures that have negatively impacted on the space. The latter can be pinpointed at their actions in terms of Bitcoin exchange-traded fund (ETF) delay, New FATF finalizing standards, among other things. Let’s take a quick look at each.

SEC’s Customary Postponement of Decision on Bitcoin ETFs

When it comes to Bitcoin ETFs, it has gotten to the point where the cryptocurrency community is no longer surprised at the SEC’s postponement of its decision to either approve or disapprove them. The SEC may have even taken advantage of the fact that it has 240 days to spare before it becomes mandatory to come to a decision.

The Bitcoin ETFs, on the other hand, was proposed by VanEck, an investment management firm and Bitwise Asset Management, a cryptocurrency index platform. A decision for their approval/disapproval was postponed on March 29, 2019, to May 16 and May 19. However, decisions were not made on either date but were later pushed forward to August 19, 2019. There’s still room for another delay since the final deadline is on October 18, 2019.

It is expected that if these ETFs are approved, then it could potentially bring fresh money into the crypto market which will, in turn, impact positively on the price of cryptocurrencies. As a result, the SEC’s procrastination in making a decision only creates a delay as to when that will happen.

SEC Makes Regulation of Cryptocurrency its Top Priority

At the beginning of the year, the SEC made it known that cryptocurrencies will be its top priority for 2019. It outlined that the sector is becoming increasingly large and more fund is being managed by investment advisers. It, therefore, brings about a need to protect investors through the provision of a fair and efficient market.

In a bid to achieve its aim, a number of crypto platforms have been fined over securities violation. An instance of this, is Alex Tapscott, a blockchain author whose investment firm, NextBlock Global was fined a $25,000 by the SEC. According to the regulator, NextBlock had offered investors unregistered securities and given them false misinterpretation about the company.

That was not the last of its kind given that Ted Livingston, CEO of Kik, a messaging platform that uses the cryptocurrency Kin revealed that negotiations between Kik and the SEC had cost the company $5 million. In this case, the regulator stated that the ICO for Kin where $98 million was raised may have violated the U.S. securities laws.

Financial Action Task Force to Finalize its New International Standards

On the other hand, the Financial Action Task Force (FATF) has made plans to finalize its new international standards for regulating the cryptocurrency industry. The standards will require cryptocurrency exchanges and wallet providers to collect, verify, store, and share information pertaining to where and whom they transfer money to.

While that may be similar to Know Your Customer (KYC) procedures that have become a thorn in some investors’ flesh, this new rule takes it one step further. That is to say, there will also be a “travel rule”. The rule requires exchanges and other service providers to transfer data about customers between each other when funds are sent which is quite similar to the operation of banks.

The new standards have caused another uproar in the crypto community with reputable members of the space pointing out that it will tamper with user privacy. Moreover, collecting and sharing a user’s information will only help to drive people away from regulated platforms.

This and many more are only some of the ways the U.S. regulators have made attempts to hurt the cryptocurrency industry. Whether it is in a bid to actually protect investors or deter them entirely from investing in these cryptocurrencies, no one can tell of a certainty. It is, however, worthy to note that despite these actions, investors interest in these virtual assets has not waned.