The U.S. Securities and Exchange Commission (SEC) has certainly been doing its job when it comes to regulating the cryptocurrency market this year. Now, the independent agency is dropping the proverbial banhammer on unregistered cryptocurrency investment funds.
As reported by CNBC, the SEC issued a cease-and-desist order alongside a $200,000 fine to Crypto Asset Management and Timothy Enneking, the fund’s founder.
According to the agency, Crypto Asset Management never bothered to register with the SEC, despite marketing itself as the “first regulated crypto asset fund in the United States.” In doing so, Enneking and company were in willful violation of U.S. securities laws.
As noted by CNBC, “The case is the SEC’s first against a fund managing digital assets and marks an extension of the agency’s crackdown from cryptocurrencies to those investing in them.”
Crypto Asset Management is based out of La Jolla, California, and managed $37 million in assets at the close of last year. The fund’s clientele includes high-net-worth individuals and institutional investors — an interesting note, given that everyone in the cryptocurrency space is apparently still waiting for institutional investors to enter the market.
Many clients were reportedly attracted through social media, interviews on traditional media, and through the company’s official website.
Though Enneking never registered with the SEC, he claims to have fully complied with the agency’s orders. He also stated that no investors were harmed, and told CNBC that the information detailed in its report is “old news,” explaining:
We have been fully in compliance with the SEC since shortly after they let us know they had concerns about two passages on our website.
What do you think about the SEC’s crackdown on unregistered cryptocurrency investment funds? Let us know your thoughts on the regulatory environment in the U.S. and worldwide in the comments below!
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