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SEC Subpoenas Michael Arrington and 80 Cryptocurrency Firms

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In its bid to gather as much information as possible, the Securities Exchange Commission (SEC) has stepped up its efforts through subpoenas. One of the latest subjects for this is Michael Arrington, the TechCrunch Founder. The U.S SEC has summoned Arrington in connection with a $100 million cryptofund as part of its broader investigations into the world of cryptocurrency.

In an interview with CNBC on Thursday, Arrington confirmed having received a subpoena, saying that, in fact, each of the cryptofunds he has had dealings with have also been summoned.

The Need to Have the Right Framework in the Market

In recognition to the lack of rules from the SEC regarding the cryptocurrency market, Arrington says as much as he is fine with the summons, the commission ought to put structures in place that will see a better understanding among the stakeholders and the commission. He says the market is craving to have an organized framework with which all companies can work.

With the development of digital coins, the SEC is yet to make it clear whether the securities laws currently in place also apply to these digital products. As much as they would want everyone to believe that these rules do apply, there is little effort from their side to formally communicate how developers can fully comply.

Cryptocurrency Chiefs Negatively Affected by the Move

As a result of this misunderstanding and misinformation between the digital products world and the SEC, cryptocurrency firms are left with few options with regards to distinguishing themselves from other forms of digital scams, save for the help they occasionally get from lawyers.

In the last few months, however, the SEC has been on a mission to demystify the cryprocurrency world. This move has attracted billions of dollars during this time. According to the Wall Street Journal report on Wednesday:

The SEC has issued scores of subpoenas, including requests for information about sales of new digital coins.

So far, about 80 firms have confirmed that they have received the summons. However,the  SEC was not immediately available to respond to requests for comments by CNBC. 

According to Arrington, most cryptocurrency projects by US teams have been moved offshore due to the uncertainty brought about by the SEC’s investigations. This, he says, is a shame and detrimental to the country’s development in the crypto space.

It is clear that the SEC is going through a hard time trying to figure out how to regulate the emerging digital products. This is especially so considering how quickly they keep evolving.

Photo of Michael Arrington by Joi, CC BY 2.0.

What do you think about the SEC’s move to issue subpoenas to cryptocurrency firms? Is it a move to streamline the industry or simply an unnecessary disruption to digital products?  Let us know what you think in the comments below.

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