Two U.S. financial regulators are increasing their agencies' commitment to bringing closer scrutiny to the country's cryptocurrency industry.
In a Wall Street Journal op-ed published yesterday, both the Securities and Exchange Commission (SEC) ands the Commodity and Futures Trading Commission (CFTC) voiced that they are devoting a significant portion of resources to monitoring the industry. And along with other authorities, they will continue to stamp down on fraudulent activities in the market.
The article was co-written by Jay Clayton and J. Christopher Giancarlo – chairs of the SEC and CFTC, respectively – and is the latest public statement from the financial regulators indicating the increasingly strident efforts being made to oversee the industry.
In July last year, the SEC issued the notable announcement that the agency may consider tokens issued during initial coin offerings (ICO) as securities that must be registered with the agency.
Yet, in the WSJ piece, Clayton and Giancarlo warned those who might try and circumvent the guidance, saying:
"The SEC is devoting a significant portion of its resources to the ICO market ... Market participants, including lawyers, trading venues and financial services firms, should be aware that we are disturbed by many examples of form being elevated over substance, with form-based arguments depriving investors of mandatory protections."
Further, cryptocurrencies are now being "promoted, pursued and traded as investment assets," while their much-touted utility as an efficient medium of exchange now a "distant secondary characteristic," they added.
The comments are also in line with recent moves by the SEC in halting ICO activities and filingcharges against their organizers. Just last week, the CFTC, which treats cryptocurrencies as commodities, has also notably brought up legal cases to sue allegedly fraudulent cryptocurrency investment schemes.
In addition, Clayton and Giancarlo also voiced support in the article for policies that seek to review existing laws to ensure they can efficiently regulate activities pertaining to cryptocurrency.
"Many of the internet-based cryptocurrency-trading platforms have registered as payment services and are not subject to direct oversight by the SEC or the CFTC. We would support policy efforts to revisit these frameworks and ensure they are effective and efficient for the digital era," the regulators concluded.