TechCrunch founder Michael Arrington’s $100 mln cryptocurrency hedge fund has received a subpoena from the US Securities and Exchange Commission (SEC) as part of their recently uncovered cryptocurrency industry probe, CNBC reported Friday, March 2.
Arrington told CNBC that while it’s true that his Arrington XRP Capital fund received a subpoena, “every [crypto]fund I've talked to has received one.” Emphasizing his willingness to comply with crypto-specific regulations, should they be introduced, Arrington continued:
"That's fine. They [the SEC] just have to figure out what they want. They need to set up rules so we can all follow them, and the market is begging them for that."
Multiple news outlets, including CNBC, have reported that a total of 80 firms have already received subpoenas from the SEC.
Arrington’s comments echo those of Overstock CEO Patrick Byrne, whose crypto subsidiary was also subpoenaed by the SEC this week. Byrne said he “actually supports” the cryptocurrency enquiries overall, adding:
“The more of a regulatory spotlight they bring, the better we look.”
However, Arrington mentioned that the lack of clarity from the SEC on crypto-specific regulations has led to originally US-based crypto projects moving outside of the country, which is a “shame”, adding:
“The U.S. has just frozen itself.”
Jason Gottlieb, a partner at law firm Morrison Cohen representing PlexCorps, whose assets the SEC froze after alleging its “scam” Initial Coin Offering (ICO) was actually a sale of unregistered securities, told CNBC that the subpoenas have come from New York, Boston, and San Francisco SEC offices:
"Clearly it's a coordinated, grand investigation. I would expect it's going to continue throughout this year.”
Gottlieb added that he sees the SEC probe as ending up with a “hodgepodge of court decisions," and believes that the Supreme Court may end up deciding the cases coming out of the probe.
In mid-February 2018, the SEC reported that they had suspended the trading of three companies that are related to both cryptocurrency and Blockchain technologies.
Earlier in February, during the joint SEC and Commodity Futures Trading Commission (CFTC) crypto hearing, SEC Chairman Jay Clayton said that every ICO-issued token the SEC has seen so far should be considered securities and registered as such, but that “true cryptocurrencies” should be smartly and practically regulated.