- Telecommunications Giant Vodafone Leaves the Libra Association
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- South Korea Might Impose 20 Percent Tax on Cryptocurrency Profits
- Report: Terrorists Increasingly Use Crypto to Raise Funds Anonymously
- Canadian Securities Administrators Subject Crypto Exchanges to Securities Laws
As the primary financial watchdog in the United States, the Securities and Exchange Commission (SEC) can be likened to a mom who oversees the affairs of her children – financial firms including crypto firms. Like every mom, the SEC keeps its children in check by laying down some ground rules on the dos and don’ts in the home. And as expected of every young child, they see these rules as rather stringent and would love to be cut some slack.
Well, the SEC believes it is for the greater good; and therefore, they are not ready to spare the rod. However, recent events show that mom may be going soft on some selected few I would like to call the prodigal sons.
These selected few encompass every firm that retraced its steps back home. And by that, I mean firms which realized they have been in the wrong for long and decided to do what is right by coming to terms with the rules laid down by the SEC. Such prodigal firms usually get a better treatment compared to those the SEC fished out from the lot.
Speaking with Fortune, the chief executive officer of Airfox, Victor Santos, affirmed that it is best to be on track with the SEC rather than fighting it. Santos spearheaded an initial coin offering (ICO) in 2017 in which he raised $15 million. Following the SEC 2017 report that pretty much classified all tokens (including ICOs) as securities, the firm was supposed to register the tokens before the offering. Notwithstanding, Santos realized his mistake and decided to make peace with the SEC before he will be fished out.
Upon reporting his deeds to the SEC, he was cut a deal where he would pay a fine of $250,000 and also refund the money made to the investors involved with additional interest. Moving forward, Santos is also required to file regular, audited financial statements of the firm. That said, Santos added that he look forward to a future where the SEC would recognize the difference between asset, payment, and utility tokens like Switzerland has done.
Another example of these prodigal firms is the first firm which reported itself to the SEC – Gladius. Amid the turbulence that lined SEC’s relationship with crypto firms last year, Gladius summoned enough courage to come clean to the commission without being fished out. The gesture was applauded by the SEC, and Gladius received the best deal ever.
Despite its wrongdoings according to the SEC laws, the firm was cut a deal which required them to refund the $13 million made from their 2017 ICO only. No fine or interest whatsoever. The SEC used Gladius’ case as an example to other firms in hiding.
With these examples, it is safe to conclude that it is best to come clean with the Commission as they are willing to forgive any prodigal firm.