One of the most progressive endeavours in the financial sector affecting mass adoption has been that of whether governments are willing to actively regulate a class of assets against fraudulent rent seeking by unscrupulous market actors.
While most markets are governed by inherent reputation mechanisms, that operate as a forewarning to future investors, cryptocurrency markets – because of its international nature has taken more time to form these reputation mechanisms. As a result, regulation in the most advanced countries of the world are lagging and are a step behind the innovation. What is interesting though is that decentralization – like the cypherpunk movement – if left unregulated or if banned can continue to exist underground, without any oversight.
As many different types of assets such as security tokens and cryptocurrencies expand in their reach globally, SEC has stepped up in their functions by separating financial technology regulation from regular security regulation. The FinHub website recently separated from SEC’s main website offers several insights for all kinds of token issuers and for the general public. Similarly, the website also provides information about different decisions taken by SEC’s FINHUB team for example, the rejection of Winklevoss Bitcoin Trust ETF, the no-action letters issued to Paxos Trust and such..
These regulations, be they for ICO’s or for other forms of secondary token assets issued by the FinHub are worth a read at the FinHub website and provide guidance to those in the industry and those in academia about future directions the space of crypto. The separation of Finhub from SEC itself signals that existing regulations and frameworks for analysis may not be sufficient to regulate this sector fairly to prevent malfeasance and to protect the wealth of a county’s citizens.