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What does the SEC warning shot on crypto mean?  – Tech Crunch


Yesterday was a big day for the crypto industry. A former Coinbase product manager has been arrested alongside his brother and a friend, and charged with running a cryptocurrency insider trading scheme by the US Department of Justice (DOJ).

At the same time, the United States Securities and Exchange Commission (SEC) filed a separate document on the matter, designating a number of assets traded by the group as cryptocurrency securities, a classification which has raises eyebrows.

“I think it’s odd that the SEC is suing three people for violating securities law, arguing that at least nine of the 25 digital assets they bought and sold in the alleged scheme are considered to be securities, but are not suing the exchange that listed these digital assets,” Hailey Lennon, a partner at law firm Anderson Kill, told TechCrunch.

“The truth is, if the federal government wanted this industry regulated, it would be.” Michael Fasanello, Chief Compliance Officer, LVL

The classification of certain crypto assets as securities can have major implications for the digital asset industry, which has largely benefited from years of little or no regulatory oversight.

Although crypto has been somewhat free of regulation due to its de novo products, it is facing similar issues to what other financial markets have seen.

Insider trading existed long before cryptocurrency, Michael Fasanello, chief compliance officer at LVL, told TechCrunch. “The crime has remained the same, it’s just the modality that is different.”

As the industry worries about what lies ahead, lawyers and others in the crypto space have shared their thoughts with TechCrunch on what the classification of certain crypto products as securities could mean for the industry. ‘industry.

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