The top US securities regulator has signaled its intent to crack down on cryptocurrency exchanges for alleged violations of federal laws governing securities trading. In a statement dated March 7, the Securities and Exchange Commission (SEC) wrote that cryptocurrency exchanges that list ICO tokens the agency deems to be securities are operating “potentially unlawful” trading platforms. While most token issuers have sought to skirt securities regulations by categorizing their tokens as “utility tokens,” SEC Chairman Jay Clayton has repeatedly said that the majority of ICOs he has observed constitute securities offerings. As the SEC’s statement indicates, the “security” classification implicates not just companies that distribute their tokens through ICOs but also exchanges that list them on their trading platforms.
Telegram closed its pre-sale ICO at record-breaking numbers. The team sent a document to the U.S. Securities and Exchange Commission (SEC) in which they claim that they have generated $850 million, so far. The SAFT backed ICO was aimed at major venture capital firms and other cryptocurrency whales. For putting money in early, these investors will receive discounts on the platform’s GRAM tokens. The public token sale is set for March and the team anticipates it will raise another $600 million more. However, that number may grow after the immediate success of the Telegram pre-sale. The messaging app was founded by Russian entrepreneurs Pavel and Nikolai Durov who banked on their social media company VKontakte. Telegram runs very similarly to WhatsApp but is said to be more secure. Its current business model currently makes no revenue, as Pavel Durov currently pays for all the app’s expenses via the $300 million made from their first social media company. Despite all the excitement around the mobile messaging application and the insane amount of money raised in its pre-ICO, some individuals remain unimpressed. There have been many critics that have questioned the app’s security in the past. The app doesn’t encrypt its messages by default and many just assume it does, but it must be turned on as an additional setting.
Bitcoin’s bull run failed to break the resistance level of $12000; BTC fumbled for the second straight day and wiped almost $1800 off in the last two days alone – investors are now looking for the new support level. It seems more bearish comments may have a part to play in the current selloff – Bitcoin found the bottom around $6000 after shedding more than 70% of its value. Though South Korea has announced its support of cryptocurrencies, pessimistic comments from England and the arrest of BitFunder founder Jon Montroll in the United States raised traders concerns. Is this affecting bitcoin price? Bitcoin trades just over the $10,000 mark today, while Ripple and others are declining at a quick rate. U.S. regulators had announced their support of legal cryptocurrency trading when they met with the U.S. Senate banking committee early this month. However, the regulators had proclaimed that they will not let illegal activates through cryptocurrency trading. The U.S. regulators were found steadfast in their claims. The U.S. Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI) arrested Jon Montroll, who is the owner of bitcoin-denominated stock exchange, BitFunder.
Bank of America, one of the world’s largest financial institutions, admitted in an annual report that cryptocurrencies are a threat to its business model. The report, which was dated Feb. 22 and filed with the US Securities and Exchange Commission (SEC), listed a range of economic, geopolitical, and operational risks that the Charlotte, NC-based bank faces as it heads into the new fiscal year. For the first time, rising cryptocurrency adoption made the list. The bank, which recently barred its customers from using credit cards to purchase cryptocurrencies, said that this and other similar policies could cost the firm clients. In an astounding admission, the bank — second-largest in the US in terms of total assets — said that widespread adoption of cryptocurrencies and other fintech innovations could require the bank to make “substantial expenditures” to update its existing services and remain competitive with upstart firms.
The US securities watchdog has put the kibosh on trading in three listed companies with ties to cryptocurrencies and blockchain. On Feb. 16, the US Securities and Exchange Commission (SEC) announced it had suspended trading in these entities — all three of which have the same CEO at the helm, Patrick Johnson — based on announcements revealing the way they did business and valued cryptocurrency and blockchain assets. Cherubim Interests (CHIT), telecom company PDX Partners (PDXP) and holding company Victura Construction Group (VICT) each had announced the acquisition of AAA-rated assets with convertible preferred stock from NVC Fund, a division of a cryptocurrency and blockchain-driven private equity investor. Meanwhile, CHIT, a construction and real estate development company, also revealed its plans for an upcoming ICO in which it planned to issue the SJT coin “for financial and societal gain,” all of which made its way onto the radar of the SEC. The companies are considered penny stocks and trade in the OTC market. The SEC used the opportunity to repeat its warning to investors about listed companies jumping on the coattails of cryptocurrencies and blockchain to drive their shares higher.