Cryptocurrency Exchanges Might Be Subject To SEC Regulation

Cryptocurrency Exchanges Might Be Subject To SEC Regulation

SEC`s report stated that cryptocurrency exchanges that trade security-coins should soon be regulated.

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The Securities and Exchange Commission (SEC) investigated cryptocurrency transactions that took place between April and May 2016 and found that intermedieries may have violated the federal securities law.

SEC`s report stated that cryptocurrency exchanges that trade security-coins should soon be regulated.

The Commission has also raised questions regarding the US federal securieties law to the offer and sale of DAO Tokens, created and sold by German company Slock.it UG, which relies on cryptocurrency Ether that is powed by the Ethereum blockchain.

According to SEC`s report, The DAO offered and sold about 1.15 billion DAO Tokens in exchange for a total of around 12 million Ether (“ETH”). The total ETH raised was valued at approximately $150 million.

“After DAO Tokens were sold, but before The DAO was able to commence funding projects, an attacker used a flaw in The DAO’s code to steal approximately one-third of The DAO’s assets. Slock.it’s co-founders and others responded by creating a work-around whereby DAO Token holders could opt to have their investment returned to them, as described in more detail below.”, as SEC explained in the report.

In the specific incident, the report found that The DAO did not comply with the law. Still, the SEC has decided not to press charges.

“Those who offer and sell securities in the United States must comply with the federal securities laws, including the requirement to register with the Commission or to qualify for an exemption from the registration requirements of the federal securities laws.”, reads on SEC`s report.

“These requirements apply to those who offer and sell securities in the United States, regardless whether the issuing entity is a traditional company or a decentralized autonomous organization, regardless whether those securities are purchased using U.S. dollars or virtual currencies, and regardless whether they are distributed in certificated form or through distributed ledger technology.” as they added.

BitMixer shuts down

The move comes just three days after law enforement agencies from the USA, Europe and Thailand initiated the shutdown of AlhaBay and Hansa, two of the largest dark web marketplaces.

“Despite the huge profit we earn, we are closing our activity.”, as Bitcoin`s mixing service announced.

“I hope our decision will help to make Bitcoin ecosystem more clean and transparent. I hope our competitors will hear our message and will close their services too. Very soon this kind of activity will be considered as illegal in most of countries.”, as Bitmixer elaborated.

The BitMixer`s administrator said that this new developement will distinct Bitcoin from the dark market.

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