SEC Issues Subpoenas to Crypto-Currency Firms
The SEC has issued subpoenas to a range of crypto-currency firms across the US, in an apparent regulatory clamp down on the burgeoning industry.
TechCrunch founder Michael Arrington's $100 million fund is one of those being investigated by the securities regulator, according to reports.
“We received a subpoena. Every fund I've talked to has received one,” he told CNBC.
“That's fine. They just have to figure out what they want. They need to set up rules so we can all follow them, and the market is begging them for that.”
It’s still uncertain whether securities laws apply to crypto-currency and the Initial Coin Offerings (ICOs) used by the industry to raise funds for new ventures.
Around 80 firms are thought to have been subpoenad so far, with notices sent from the SEC’s offices in New York, Boston and San Francisco, according to the report.
The SEC last year issued a warning to investors about the dangers of ICOs, with cyber-fraud commonplace.
In the region of $400m has been stolen from ICOs in the past, according to an Ernst & Young report from January.
It claimed that 10% of all ICO funds are lost to hackers, who are “attracted by the rush, absence of a centralized authority and blockchain transaction irreversibility.”
In addition, cyber-criminals make $1.5m each month through phishing scams which trick recipients into either handing over the private keys to their digital wallets or making direct fund transfers.
Around $2bn has been lost from the crypto-currency exchanges themselves.
At the end of December 2017, crypto-currency start-up CEO Marko Kobal resigned and sold his 45% stake in the company he co-founded after hackers stole 4700 Bitcoins ($58m) from the firm’s wallet.
Source: Information Security Magazine