Crypto Czar June 08 2018
The SEC, Securities and Exchange Commission, is a government agency responsible for protecting investors, maintaining fair and orderly functioning of securities markets and facilitating capital formation. On June 4th, 2018 the SEC appointed Valerie Szczepanik, who previously led the distributed ledger working group, as Associate director of the division of Corporation Finance and senior advisor for digital assets and innovation. The mouthful of a title was quickly shortened to Crypto Czar, whose job it will be to promote fair, orderly and efficient markets and protect investors in this ever growing blockchain industry. As one of the first government officials to make a public comment on ICO’s, it has become clear that she is dedicated to both the innovation of blockchain technology and protecting cryptocurrency investments. While a proverbial regulatory hand in the crypto space can seem to some cryptocurrency purist as a step backwards from the original construct of a non-government regulated currency, it is really just a validation as to just how big cryptocurrency has become. In order for cryptocurrency to become standard and integrated into every day life there were going to have to be some protections in place for the user, it is becoming more regulated but not centralized, still giving life to the soul of the movement. While steps are being made to regulate cryptocurrency, giving it some security for companies who speculated it’s lifespan, the regulations will be slow coming and mostly focused on ICO’s.
An ICO is an initial coin offering, an unregulated means by which funds are raised for a new cryptocurrency. It’s become a popular way of raising capital that has been prone to scams. The way it works is, a startup offers legal tender to investors in exchange for cryptocurrency, in the form of “tokens”; these “tokens” are promoted as the future functional units of currency when the project launches. The problem is a lot of ICO’s are pump and dump schemes where the scammer talks up the value of an ICO to gain interest, drives up the value of the coin and then “dumps” the coin for a profit and like all cryptocurrency the IP address isn’t saved and therefore the location of the scammers isn’t traceable. The newly appointed Crypto Czar has already warned ICO’s to respect their fiduciary responsibility to investors even while there are no real regulations in the place because they will be coming.
In the end, the government was going to have to regulate the market, and appointing a Cyrpto Czar was just the government saying” Cryptocurrency has made it, it’s big enough and it isn’t going anywhere.” The SEC validated cryptocurrency, the Czar will make is safe for everyday investors. It’s another important step in cementing this financial revolution.
Here are a few articles about the newly appointed Crypto Czar: