The US SEC has subpoenaed three cryptocurrency venture capital firms, investigating potential violations of federal securities laws. After cryptocurrency exchanges, the regulator now appears to be going after the source: the funding of future blockchain projects.
Crypto VCs soon to be targeted by the US SEC?
According to an exclusive report from DL News, Gary Gensler's Securities and Exchange Commission (SEC) Reportedly Subpoenas 3 Cryptocurrency Venture Capital Firms for Possible Violations of Federal Securities Laws.
In other words, after attacking cryptocurrency exchanges, The American regulator has decided to attack the source, namely the financing of blockchain projectsAccording to a source close to the case, interviewed by DL News, these summonses request the provision of all contracts related to token transactions carried out by investors.
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More specifically, the SEC’s goal would be to determine whether the targeted venture capital firms would seek to purchase securities (i.e. tokens) at a preferential price to fund projects in order to resell them to the public later. Given the potential violations of federal laws involved, the SEC would most likely rely on the famous Howey test, the heart of the eternal debate aimed at determining whether or not a particular cryptocurrency constitutes a financial securityto conduct his investigation.
“ The staff of the U.S. Securities and Exchange Commission is investigating the above matter to determine whether violations of the federal securities laws may have occurred, ” can be read on the first page of one of the documents sent by the SEC to one of the investment companies concerned.
The names of the companies involved have not been disclosed.
🗞️ In related news – Ripple (XRP) hit with $125 million fine in SEC dispute
Shortly after the collapse of cryptocurrency exchange FTX in late 2022, the U.S. Commodity Futures Trading Commission (CFTC) targeted venture capital firms, accusing them of sometimes “turning a blind eye” to their due diligence process for potential investments to prevent fraud.
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Source: DL News
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