The U.S. Securities and Exchange Commission (SEC) is on the move and there seems to be no sign of slowing down in sight. This should come as no surprise since the much-anticipated decision of the Bitcoin ETF is scheduled for February 2019. In the meantime, the SEC has been moving in on celebrities promoting ICOs as well as taking projects to court. Today we catch up with the SEC to see what they have been doing in anticipation of the February event.
SEC moving in on celebs
Last year, the SEC made it quite clear that promoting an ICO is fraud when the celebrity, YouTuber, writers, publications etc do not disclose if they were compensated. In recent news, the SEC’s case against boxer Floyd Mayweather and DJ Khaled, a music producer were settled. Apparently, Mayweather received $100 000 from Centra Tech Inc. whilst DJ Khaled received $50 000. Both failed to disclose the payments. It comes down to ICOs being classified as securities in the U.S. Since the ICO in question was promoted within the U.S., it should have complied with existing securities legislation.
So, both parties agreed to pay penalties and interests. It cost Mayweather a staggering $614 775 in penalties, disgorgement and prejudgment interest. DJ Khaled paid $152 725 for the same. Talk about bad business decisions! Both have also been prohibited from promoting digital assets or securities for a couple of years.
It is interesting to note that the co-founders of Centra Tech were arrested and indicated in the $60 million ICO fraud.
Meanwhile, the SEC has warned other social media influencers to comply with the law when promoting ICOs to the public and to disclose if they have been paid to promote an ICO.
Read Bitmart’s Blog “Musicians sued for fraudulent ICO”.
SEC takes Blockvest to court
The SEC recently tried to issue Blockvest with a preliminary injunction. But, the San Diego court rules in favour of Blockvest. The SEC wanted to freeze Blockvest assets after claiming they were selling investment contracts under the false pretense that they had the SEC’s approval. But the SEC failed to supply compelling evidence to the court and lost the case.
Blockvest is a security token built on the ERC20 platform. It promotes a “smart economy” that allows digital identity to be given to digital assets.
When will the Bitcoin ETF arrive?
We know that the SEC has postponed the announcement of the ETF to February 2019 but what are the odds of them approving the Bitcoin ETF? The SEC has met with the teams from VanEck, SolidX and CBOE who plan to offer Bitcoin ETF products to clients. An anonymous source was quoted by Abacus Journal saying that the chances of the SEC approving the Bitcoin ETF is “high”. For more info, click here.
In their proposal, VanEck has given many reasons why the ETF should be approved. First, the relevant markets are regulated. Other reasons include concerns about price manipulation that have been mitigated and it also promotes investor protection.
However, this week the SEC Chairman Jay Clayton said market manipulation and exchanges’ ability to handle these market manipulations are of concern. Clayton also called for market surveillance tools to be implemented in the crypto industry so that investors may have a fair assessment of Bitcoin’s price. Thus far, Nasdaq and NYSE have implemented such tools.
In conclusion, despite Bitcoin’s price being so low, Google Trends is showing an increase in the number of Bitcoin searches. Surprisingly, the majority of these searches are from South Africa.