SEC To Investigate 100 Hedge Funds for Cryptocurrencies
The Wall Street Journal has reported that The Securities and Exchange Commission is preparing to look closer on and maybe even investigate as many as 100 hedge funds that deal with cryptocurrencies.
This action is allegedly not related to the other investigations already being under way, which mostly target various crowdsales run by startups and their initial coin offerings, which may or may not be considered investments or shares in these companies. These actions, as well as the current hedge fund research are run by the Commission in order to finally come up with some regulations and guidelines on how cryptocurrencies and investments related to them should be addressed.
Marc Elovitz, a partner at Schulte Roth & Zabel LLP company, which advises many hedge funds, explained that this SEC investigations news shouldn’t be considered too problematic as “This is a way for the SEC overall to gather information and learn about important new technology and products.” Examiners often conduct these types of operations “to educate the commission overall about new businesses or new industries.”
The WSJ source, explains that the operation will most likely begin in the next two months. The examiners will check if the assets bought by fund managers actually match the ones advertised to investors. The SEC will also analyze the documentation provided to the investors to see if the risks connected with the investment were clearly and transparently provided to the investors. Currently, SEC has identified and chosen at least 100 fund managers with holdings focused in various cryptocurrencies.
We can see a growth in the number of information that appears in various cryptocurrency related news sources, that touches the SEC and regulations topics. Earlier this month, the SEC released a memo informing that platforms, which trade digital assets that fit the definition of a security, need to be registered with the SEC.
