You’ve heard about it in forums and chat groups. But what does SEC stand for in reality? What is its involvement in the cryptocurrency market and how are their decisions affecting the prices of crypto.
What does SEC stand for?
SEC stands for the U.S. Securities and Exchange Commission. It is an independent federal government agency that enforces security laws, proposes security rules and regulates the securities markets.
The commission was created in 1934, with the purpose to restore the public’s confidence in financial markets after the 1929 stock market crash. Its goal is to protect investors from dangerous financial practices and fraud.
To do this, they require full financial details of the companies that offer stocks, bonds, mutual funds, and other securities to the public.
How is the SEC involved in the world of cryptocurrency?
At the moment, the SEC only provides guidelines and hints on how they might want to regulate the cryptocurrency market in the future.
- First, the SEC had stated that most tokens from ICOs should be considered securities, but their arguments were never sustained or confirmed.
- Next, they confirmed that Bitcoin and Ethereum are not securities, meaning that the SEC wouldn’t have any power on regulating their trading.
- Finally, the SEC has rejected Bitcoin ETFs numerous times, stating that there wasn’t enough transparency or information to prevent fraud and market manipulation at the moment.
What is the SEC’s involvement with Libra?
The SEC began scrutinizing Facebook’s Libra project as soon as it was announced. Having a userbase of 2 billion people and no real competitors made Libra a regulatory experiment.
The SEC will definitely have an influence on the Libra currency. A new bill on stablecoins could even make Libra a security. This would hurt Facebook as it opens the way for more regulation by the SEC.
How does the SEC affect Token Sales?
The crypto community doesn’t seem to like the SEC that much. They tend to hinder sales and lead to FUD.
On the contrary, announcements that benefit Bitcoin and Ethereum usually to motivate buyers and drive the prices up.