Ever since the 2017/2018 cryptocurrency bull run and ICO season, the U.S. Securities and Exchange Commission has been scrutinizing the entire cryptocurrency industry with special attention on ICOs that may be selling unregistered securities. While the SEC is yet to formally list all the cryptocurrencies that are securities, it has released guidelines that would give investors an idea and it has charged some ICOs for selling unregistered securities. Now, in what would appear like another attack on the cryptocurrency industry, the SEC has ordered two ETFs to remove their blockchain tickers. This is according to the report on Bloomberg.
U.S. SEC Demands That Two ETFs Take Down Their Blockchain Tickers
Bloomberg got the information from a source familiar with the matter. According to the source, the two ETFs from Reality and Amplify added blockchain to their early fillings but they were asked to change their names and remove the blockchain tickers. The product would still be related to blockchain technology but the blockchain name and ticker would be removed. The ETF from Amplify is being traded as BLOK. Instead of the description to contain the term blockchain technology, it describes it as transformational data sharing ETF. The ETF from Reality is titled BLCN and it describes the product as Nasdaq NexGen economy ETF.
Apart from these two funds, the report also claimed that some other funds that had the blockchain ticker were asked to change their tickers by the SEC. While this may appear like an attack on the cryptocurrency and blockchain space, the SEC is only trying to do its job and protect investors in line with the Investment Company Act of 1940. The act stipulates that issuers of ETFs must not use misleading or deceptive names. So, before an issuer can use the word blockchain in its name or as its monikers, at least 80% of its technology must be blockchain related.
Bitcoin (BTC) Price Today – BTC / USD
The truth is that as the blockchain hype started, many companies started adopting the name just to benefit from the hype even when their products and services have nothing to do with blockchain technology. There have been an increase in the number of ETFs that offer a wide range of services and have little relationship with blockchain technology. Jay Clayton, the chairperson of the SEC, said that all the companies that added blockchain to their names during the 2017/2018 bull run will face extra regulatory scrutiny.
What do you think about the ETF name change request by the SEC? Is it an attack on the industry or purely in the interest of investors? Share your thoughts in the comment section.