The SEC has been very active in the cryptocurrency space this year, issuing not only its own enforcement actions, but also guidance on how to handle digital assets.
The commission has scrutinized many companies and platforms related to cryptocurrencies. As the field is still largely unregulated, there are certainly plenty of opportunities for scammers, some of whom have been caught fraudulently.
In recent weeks, the SEC has taken two significant steps that may indicate its intention to continue cracking down on fraud in this area.
First, the company filed a complaint against Ripple Labs Inc. for failing to register as a money transfer provider when helping customers convert fiat to XRP tokens. The SEC complaint alleges that Ripple sold XRP to institutional investors without disclosing that it was selling an “investment product†rather than Bitcoin or Ether tokens. Such sales were not properly disclosed and may have violated federal securities laws.
Second, the SEC filed a complaint in the United States District Court for the Northern District of California, ordering Ripple Labs to suspend trading in XRP until it receives proper registration from the Commission.