Yesterday was big day for the crypto industry. The former Coinbase product manager was arrested along with his brother and friend and charged by the US Department of Justice with running a cryptocurrency insider trading scheme.
At the same time, the US Securities and Exchange Commission (SEC) filed a separate case document identifying a number of assets traded by the group as crypto-currency securities, a classification that raised eyebrows.
“I think it’s odd that the SEC has sued three people for securities law violations, alleging that at least nine of the 25 digital assets they bought and sold in the alleged scheme qualify as securities, but does not harass the exchange where these digital assets were listed. Hayley Lennon, partner at law firm Anderson Kill, told TechCrunch.
“The truth is, if the feds wanted this industry to be regulated, it would be.” Michael Fasanello, Compliance Director, LVL
Classifying some crypto assets as securities could have major implications for the digital asset industry, which has benefited greatly from years of lack of regulatory oversight.
While the cryptocurrency has been somewhat free from regulation due to its de novo products, it is facing challenges similar to those seen in other financial markets.
Insider trading has existed long before the advent of cryptocurrencies, Michael Fasanello, director of compliance at LVL, told TechCrunch. “The crime remains the same, only the modality has changed.”
As the industry worries about what lies ahead, lawyers and other crypto experts shared their thoughts with TechCrunch on what the classification of some crypto products as securities could mean for the industry.
Credit: techcrunch.com /