SEC Starts FinHub as Strategic Crypto Innovation and Blockchain Technology Resource
US SEC Launches Strategic Hub For Innovation and Financial Technology; What is It?
Back on October 18, the U.S. Securities and Exchange Commission (SEC) decided to announce a new arm in charge of protecting investors from fraudulent schemes. The new agency is known as Strategic Hub for Innovation and Financial Technology (FinHub) and it will be focused on fintech-related fields.
The US SEC has always been involved in the virtual currency market searching for illegal ICOs and protecting investors from fraudulent schemes in the market. However, the power of the SEC has been limited since there is no clear regulation about ICOs or cryptocurrencies. Although it couldn’t act as it would have liked, it was able to issue public warnings for investors.
This is why the US Rep. Bill Huizenga said that the agency has limited possibilities and that it should have more power to regulate the crypto market following the rules related to currencies and stocks.
A group of lawmakers decided to send a letter to the SEC Chairman, Jay Clayton. The intention was to provide clarity regarding how the US watchdog wants to control virtual currencies.
The lawmakers wrote:
“It is important that all policymakers work toward developing clearer guidelines between those digital tokens that are securities, and those that are not, through better articulation of SEC policy, and, ultimately, through formal guidance or legislation.”
Back in October, Yahoo Finance and Decrypt Media suggested that the SEC expanded its crackdown on Initial Coin Offerings (ICOs).
Apparently, the new FinHub will be replacing and building on the work that was performed by several internal working groups at the institution. The press release informs that these works are going to be related to blockchain and virtual currencies. Additionally, Valerie A. Szczepanik will be in charge of the FinHub. Szczepanik is considered a balanced figure that aims at protecting investors but facilitating technology development as well.
The new FinHub will be facilitating communication between the regulatory agency (SEC) and investors. At the same time, the FinHub will be helping fintech startups, Initial Coin Offerings and other initiatives to be fully compliant and follow the necessary rules.
According to the SEC Chairman Clayton, the FinHub will be providing a central point of focus for the institution to be able to monitor and engage on innovations in the market.
“The FinHub provides a central point of focus for SEC’s efforts to monitor and engage on innovations in the securities markets that hold promise, but which also require a flexible, prompt regulatory response to execute our mission,” Clayton stated.
Szczepanik said that they will have an easier job being able to hear those involved in the cryptocurrency and blockchain technology market.
With this new website, users will be able to contact the SEC without intermediaries and even schedule a meeting with the agency after submitting the required information. Furthermore, the next year, the new agency has plans to run a FinTech Forum that focuses on distributed ledger technology (DLT) and virtual currencies.
In addition to it, the SEC will also be providing important information about cryptocurrencies and blockchain technology. FinHub will upload SEC statements related to the market and other comments made by SEC’s members. The agency will also publish educational content about ICOs and other related topics.
Although the agency is trying to improve the regulatory landscape, uncertainty is still influencing the market. The hub represents an important decision to move towards clear regulation and clarity, but it is clearly not enough. It will be educating people and investors, ICOs will also receive advises, but it will not clarify the whole regulatory system around blockchain technology, cryptocurrencies and Initial Coin Offerings.
At the same time, the FinHub website says that the agency will be working with regulators from all over the world. Clearly, this is something positive for the industry as well.