Is The SEC Planning to Crackdown Ripple and Ethereum? 

ethereum price increase

More bad news regarding the digital token markets made headlines this month when a former U.S regulator said two top cryptocurrencies, Ripple and Ethereum, are “noncompliant securities” run outside the law. This is a potential disruptor of crypto markets and could undermine the liquidity of Ripple and Ethereum as well as put other financial institutions and exchanges in legal issues with the SEC. However, there’s a bright spot for investors as reports indicate that the chances of the monetary, regulatory authority in the country taking action against operators is slim.

See Also: What it Will Take For Ripple And Ethereum To Beat Bitcoin?

What We Know 

The purpose of an initial coin offering is to raise funds for the creation of an online service via which the tokens could be redeemed eventually. However, a large number of ICO participants, see tokens as a means to an end and hope to sell them to the next buyer as opposed to using them for the right service. Occasionally, ICOs have also amounted to scams where organisers have absconded with funds. While the U.S regulator was slow to act, the agency sent a warning last July insisting that tokens sold during an initial coin offering could be securities that have to be registered similarly with a share of GM or Apple. Last month, the head of SEC Jay Clayton said every token sale he had seen was a securities offering.

See Also: China vows to continue the crackdown on ICOs and Illegal fundraising

The SEC’s crackdown on Ripple and Ethereum can convulse crypto markets. However, former regulators and securities lawyers believe the chances of this happening are remote. Others share this view, saying the SEC could make a case against Ethereum and Ripple but such an action would be a hard slog and the crypto firms would be in for a long court fight. The general view is that the agency prefers to position its resources and capital towards another direction.

Meanwhile, the U.S financial regulatory may be wary of the chilling innovation regarding the growing crypto industries and Blockchain.

See Also: Ripple vs NEM: Which one should you invest in? (XRP vs XEM) –Tue May 01

 

 

 

 

 

 

 

 

 

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