It may have taken its time to get into the gist of the crypto industry, but its all in now. The U.S Securities and Exchanges Commission has always made its presence known. It has warned severally that some cryptos qualify as securities and should abide by the relevant law. However, in recent months, it has backed its talk with actions. 

For those that have fallen victim to the regulator’s bloodthirst, the consequences have been far-reaching. One of the victims was Airfox, a blockchain startup that raised $15 million in its ICO in 2017. Airfox was one of the first two victims, setting the stage for what some termed as the death of the ICO industry in the U.S.

After the SEC charged Airfox with selling unregistered securities, the company came forward to strike a deal. Victor Santos, the 26-year-old CEO and founder, was ordered to refund the investors, with interest. Moreover, he was ordered to pay a $250,000 fine to the Jay Clayton-led commission.

At the time, Santos said that he was just happy to get over the whole ordeal. He hoped that it would help future blockchain startups know what to do and what to avoid. However, in a recent interview with Fortune, he wasn’t as optimistic. His advice to other blockchain startups in the U.S; move your operations to Switzerland.

For those who can’t, Santos advised them to register with the SEC promptly to avoid going through the ordeal that he did. Currently, the SEC has a lot to do to regulate the industry, he stated. However, he hopes that his interaction with the commission will help chart a way forward for the industry. The SEC must strive to get to the levels of crypto regulations that Switzerland has achieved, he urged.

You Can’t Run, You Can’t Hide

When it comes to the SEC, you can neither run nor hide. Max Niebylski realized this in time and did what no other crypto startup had done before. Max made history after his startup, Gladius Network became the first crypto firm to report itself to the SEC.

A month ago, the SEC announced that it had charged Gladius with conducting an unregistered ICO. The ICO had raised $12.7 million with the promise of a platform where users could rent out spare computer bandwidth to clients. These clients would then use the bandwidth to enhance speed and protect against cyber attacks.


The commission ordered Gladius to compensate investors with interest, as was the case with Airfox. Gladius also had to register its tokens as securities and file regular reports for at least 12 months. The startup consented to the terms, but neither denied nor admitted the charges.

Unlike Santos, Max is more upbeat and he believes that his action made the industry better. He does, however,  admit that the move was quite daring. He described it as “jumping into the jaws of the beast and making it to the other side.”

The SEC’s decision not to penalize Gladius set a good precedent for other crypto firms. Many have been afraid that if they enlisted the help of the SEC they may end up paying hefty fines. However, the commission showed that it’s more interested in working together than fighting the crypto industry.

 


 


I am a very awesome human. I love writing, and I am awesome at it. I am a blockchain and cryptocurrency enthusiast and championing the blockchain through well-crafted articles is what I do

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