According to the press release of 4th June, the U.S. Securities and Exchange Commission (SEC) has created a new position for Senior Adviser to oversee securities regulation of the crypto sphere.
Ms. Valerie A. Szczepanik is appointed as the new Senior Adviser for Digital Assets, and also appointed as the Associate Director of the Division of Corporation Finance.
She has been allocated responsibilities like “coordinat[ing] efforts across all SEC Divisions and Offices regarding the application of U.S. securities laws to emerging digital asset technologies and innovations, including Initial Coin Offerings (ICOs) and cryptocurrencies.”
Earlier, Szczepanik , the head of the SEC’s distributed ledger group, had recently participated in the blockchain consensus held at New York where is quoted by saying, “if you want [the crypto] industry to flourish, protection of investors should be at the forefront.”
Szczepanik, in her official statement struck a similar note, saying she would use the new position “to facilitate capital formation, promote fair, orderly, and efficient markets, and protect investors, particularly Main Street investors.”
SEC Chairman Jay Clayton, after the appointment responded and said that Szczepanik was “the right person to coordinate our efforts in this dynamic area that has both promise and risk.”
Cryptocurrencies are under the purview of the jurisdiction, as they are considered as securities by the SEC. A security involves the investment of money in a common enterprise, in which the investor expects profits primarily from others’ efforts, states a 70 year old Howey Test.
Jay Clayton, the SEC Chairman, stressed on certain things during the February’s US SEC and CFTC senate hearing. He stressed that a distinction should be made between tokens and major cryptocurrencies such as Bitcoin and Ethereum, as every ICO token the SEC has seen so far is considered a security.
It has recently been a subject of debate among US regulators, wherein some content Ethereum to be a security. Were such a determination to be made, its 2014 ICO would constitute an unregistered security offering.
A sweeping probe in February 2018 to raise awareness about ICOs by the SEC, in which it issued subpoenas to force the closure of a number of “unregistered securities” in the ICO space.
The organisation has recently started concentrating its efforts on educating investors about potential risks, creating a website for a fake ICO that was designed to imitate the classic “red flags” of fraudulent token sales.