The U.S. Securities and Exchange Commission has subpoenaed TechCrunch founder Michael Arrington’s $100 million cryptofund in a broader investigation into the cryptocurrency sector. The SEC has become increasingly vocal about token sales over the past several months.
“We received a subpoena. Every [crypto] fund I’ve talked to has received one,” Arrington told CNBC.
A source claimed about 80 cryptocurrency firms have been subpoenaed so far.
“That’s fine. They just have to figure out what they want,” Arrington said. “They need to set up rules so we can all follow them, and the market is begging them for that.”
The regulatory uncertainty is a major deterrent in the U.S. cryptocurrency sector, since it is still unclear whether securities laws apply to cryptocurrencies. The Securities and Exchange Commission claims the regulations do apply, but has not formally laid out how developers can comply.
In order to be on the safe side, cryptocurrency companies in the U.S. rely on self-disclosure and lawyers to try to distinguish themselves from the many scams. Some of them have gone as far as banning U.S. investors from officially participating.
SEC has stepped up its efforts in the last several months to increase its oversight of initial coin offerings. Last week, The Wall Street Journal reported, citing sources, that the SEC has issued “scores of subpoenas,” including requests for information about sales of new coins and tokens.
According to Jason Gottlieb — who represents PlexCorps, a company facing SEC fraud charges — the subpoenas are coming from SEC offices in New York, Boston and San Francisco.
“Clearly it’s a coordinated, grand investigation. I would expect it’s going to continue throughout this year,” Gottlieb said.
TechCrunch founder Michael Arrington claims that the regulatory uncertainty and SEC investigations have caused some of the best cryptocurrency projects developed by U.S. teams to move offshore.
“That’s a shame,” Arrington said. “The U.S. has just frozen itself.”
As an investor, Arrington said he is also more interested in cryptocurrency projects coming out of China and nearby countries.
“The stuff coming out of Asia is uniformly high quality,” he added.