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SEC Monitors blockchain businesses

Wednesday 24 January 2018
News Summary

The US Securities and Exchange Commission (SEC) has warned American companies looking to ‘ride the blockchain wave’.

The American securities regulator said it will be monitoring firms to ensure that, when taking on new names and business models, they are not just trying to get investors in to the blockchain, AFR’s Ben Bain reported.

"The SEC is looking closely at the disclosures of public companies that shift their business models to capitalise on the perceived promise of distributed-ledger technology," SEC Chair, Jay Clayton, told an audience at a recent Northwestern law school conference. “The SEC wants to ensure those disclosures comply with securities laws.”

Clayton is concerned about how the largely-unregulated nature of ICOs and crypto-currencies could impact retail investors.

Lawyers will also come under scrutiny if they are not ‘sufficiently diligent’ with their crypto-currency clients.

"These lawyers appear to provide the 'it depends' equivocal advice," Clayton said. "I have instructed the SEC staff to be on high-alert for approaches to ICOs that may be contrary to our securities laws and to the professional obligations of the US securities bar.”