The US Securities and Exchange Commission (SEC) has formally issued a cease and desist order to a cryptocurrency hedge fund for violating securities laws.
Under the Gun
The SEC has filed a cease and desist order as well as a $200,000 fine to Crypto Asset Management LP (CAM) and to its founder Timothy Enneking, CNBC reports.
According to the Commission, the fund which had proclaimed itself as the “first regulated crypto asset fund in the United States” was never actually registered as an investment company. Thus, it was directly and “willfully” violating securities law.
After being contacted by the regulator, the hedge fund ceased its public offering and offered buybacks to its investors. Moreover, the founder has reportedly agreed to pay the $200,000 fine. However, he didn’t deny or admit the findings of the commission.
Speaking on the matter, Enneking outlined:
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.
Enneking also stressed out that no investors were harmed and that the company cooperated with the agency entirely.
Getting Serious
Back in 2017, the Commission published a report outlining the risks of Initial Coin Offerings (ICOs).
In May, the SEC served cryptocurrency business ShipChain with an administrative order to cease and desist from conducting any business transactions with the state. Yet, it wasn’t until this moment the commission had taken action against hedge funds.
The case represents the first move of the SEC against cryptocurrency hedge funds. Earlier this year, the Commission said that bitcoin and ether are not securities but ICOs are. Thus, they fall within the governing securities laws.
This week the Bitcoinist reported that the SEC temporarily suspends trading of Bitcoin and Ether exchange-traded note (ETN).
What do you think of the SEC’s move to clamp down on Crypto Asset Management? Don’t hesitate to let us know in the comments below!
Images courtesy of Shutterstock
The post SEC Shuts Down Crypto Hedge Fund for ‘Wilfully’ Violating Securities Laws appeared first on Bitcoinist.com.