The United States Securities and Exchange Commission (SEC) is on a tour to engage with cryptocurrency innovators and entrepreneurs across the country as the commission has major regulatory decisions like a Bitcoin ETF on its hands.
Last week, SEC reached out to the cryptocurrency community and the wider fintech community through its FinHub division which is primarily responsible for interactions with the tech sector.
The notice sent out to residents of San Francisco read:
“The SEC’s Strategic Hub for Innovation and Financial Technology (FinHub) seeks to engage with FinTech communities across the country and will host the first of its “local peer-to-peer” meetings from the SEC’s San Francisco Regional Office (SFRO).”
The meeting with the San Francisco community is slated for March 26, while the next stop is Denver.
There is a strong call for regulatory agencies to better understand cryptocurrencies, blockchain, and other emerging technologies so as to create an enabling environment that will benefit innovation in these areas rather than stifle its growth. FinHub is SEC’s answer to this.
As the agency wrote, FinHub makes its work more accessible to innovators, entrepreneurs, and their advisers and serves as a platform to inform the SEC’s understanding of new financial technologies. The new initiative, “Engage with FinHub” will allow the Fintech community engages with SEC staff to better understand its regulatory position and get clarifications while also giving feedback to the commission.
However, the SEC staffers will not be giving legal advice to the entrepreneurs and innovators during the tour, according to SEC’s senior advisor and associate director of the Division of Corporation Finance, Valerie Szczepanik. The advisor for digital assets and innovation who was appointed by the Commission last June explained that they can only give guidance.
“We can’t give legal advice to any individual or member of the public, but we often give guidance to folks as they talk us through their proposed projects.”
Szczepanik also confirmed that the agency was getting a good response from the FinHub initiative.
“We’re pleased with the kind of engagement that we’ve gotten through FinHub…It helps when people tell us about friction points so we know what those points are and what we might need to address as we think through the gamut of appropriate regulatory responses.”
SEC Appear to be Tough on Cryptocurrency
So far, the actions of U.S. SEC have been perceived as strict towards the cryptocurrency community. The biggest debate has been in the classification of ICO token some of which the agency says could be unregistered securities tokens.
While the agency did clear the two biggest cryptocurrencies—Bitcoin and Ethereum, it has charged some crypto entrepreneurs who issued or sold digital assets it says are unregistered securities.
As Smartereum reported, the SEC charged the Zachary Coburn, the founder of crypto token trading platform EtherDelta of operating an unregistered securities exchange. The operator agreed to pay $300,000 in disgorgement and $13,000 in pre-judgment interest as well as a penalty of $75,000. Similarly, it issued cease-and-desist proceedings against crypto investment firm CoinAlpha Advisors LLC with a penalty of $50,000 for selling unregistered securities.
An area of contention is the non-approval of Bitcoin ETF by the agency. Till date, all proposals have met a brick wall including two proposals by the Winklevoss twins who own Gemini crypto exchange.