Ethereum crashed under $500 yesterday after SEC Enforcement Division Co-Director, Stephanie Avakian, made the announcement that the agency was investigating “dozens” of crypto companies involved in unregistered ICO’s.
This week during an Investment Adviser Association conference held in Washington D.C, Avakian confirmed that the agency was taking further action against non-compliant crypto companies involved in ICOs, in a bid to provide better consumer protection, after subpoenas were issued to several startups back in February.
On July 25th 2017, the SEC ruled in a DAO token report that digital assets were to be considered securities under U.S law and were therefore subject to the relevant legislation. Under this report any crypto startup which wishes to issue tokens via an ICO must register with the SEC in a bid to increase regulatory presence in this heavily scrutinized area.
"The innovative technology behind these virtual transactions does not exempt securities offerings and trading platforms from the regulatory framework designed to protect investors and the integrity of the markets," Avakian commented.
According to Tokenmarket there are over 630 projects listed on the Ethereum blockchain to date, all of whom issued their tokens publically via Initial Coin Offerings. The ramifications of this latest report caused widespread disruption throughout the Ethereum community, as the #2 cryptocurrency plummeted by as much as -23.4% from its opening price of $601.68 yesterday to a low of $460.75.
The crash is a likely result of Ethereum HODL’ers cashing out into fiat over fears of further regulation arising from these investigations, as Charles Hoskinson tweeted earlier today.
This latest announcement from the SEC has delivered a second blow to the crypto community after headline news from Google (NASDAQ:GOOGL) this week reported their decision to join fellow internet giant, Facebook (NASDAQ:FB), in banning all cryptocurrency advertising.
With growing support rallying behind the SEC, it’s likely the crypto market will witness further regulations within the ICO space, as government bodies and industry leaders work together to crackdown on token sale scams and fraudulent projects.
Will Ethereum fall even lower as FUD continues to dominate the market or will the platform manage to regain composure and recover its recent losses? Only time will tell.
This article appeared first on Cryptovest
