Timothy Massad, now a research fellow at Harvard’s Kennedy School of Government, says the government was right in issuing the complaint, adding that while stablecoins present risks, they also open the door to opportunities…
On Tuesday the former Chairman of the United States Commodity Futures Trading Commission (CFTC), Christopher Giancarlo, publicly stated that the Securities and Exchange Commission (SEC) was “absolutely right” to sue TerraForm Labs and Do Kwon for alleged violations related to the 2017 initial coin offerings (ICOs).
In a statement released this week, Giancarlo, who held his position as CFTC Chairman from 2017 to 2019, commented: “The SEC’s case against TerraForm Labs and Do Kwon is spot on and absolutely right. Countries around the world must continue to take strong enforcement action against firms that misleadingly market unregistered securities or commodity trading systems online.”
Giancarlo’s comments come nearly one week after the SEC announced that TerraForm Labs and Do Kwon had agreed to pay a total of $8.25 million to settle civil charges against them. According to the SEC, the two companies had offered unregistered securities in the form of digital asset securities called “Litecoin ATMs”. The Litecoin ATMs were not registered with the SEC.
Giancarlo continued, “By taking action in such cases, regulators are working to maintain investor trust and deter attempts to exploit dispersed investors with promises of high return, low risk products. The SEC’s action against TerraForm Labs and Do Kwon is an important step towards accomplishing that goal.”
Giancarlo’s comments come in the wake of other recent high profile cases brought by the SEC against cryptocurrency firms, suggesting that the Commission may be taking a more aggressive stance on enforcement issues involving digital assets. This includes the SEC’s suit against Ripple Labs, which may have a significant impact on the cryptocurrency industry as a whole.
With the cryptocurrency market continuing to become increasingly popular, the SEC’s enforcement actions against such firms are likely to remain a focus. The SEC’s actions are essential in order to protect both investors and the cryptocurrency market from fraud and manipulation.
Giancarlo concluded, “As the cryptocurrency market continues to grow, I urge regulators to take a proactive approach and demonstrate to the public why the legitimate and transparent rules that govern the U.S. financial markets are important.”