
The SEC of the United States has wrapped up a case it brought against the virtual currency exchange ShapeShift, and the fine imposed on the exchange thus stands at $275,000. By doing so, the SEC ended its investigation on the Denver, Colorado-based exchange for feeling that the token sale offered at least 79 crypto assets, some of which were unregistered commodities.
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- The SEC has settled with cryptocurrency exchange ShapeShift for $275,000 over charges related to offering unregistered securities.
- ShapeShift agrees to a cease from future violations, signaling the end of its direct exchange operations in the U.S. since 2021.
- Founder Erik Voorhees clarifies that FOX is not considered a security in the settlement and asserts that ShapeShift DAO and ShapeShift.com remain unaffected.
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ShapeShift Settles SEC Charges with $275,000 Payment Amidst Regulatory Clampdown on Crypto Securities
As per the agreement, ShapeShift must pay the SEC a civil penalty of $275,000 within two weeks from the order date. This one provision encompasses the bull’ s-eye of the case, which is a cease-and-desist from future violations. This element primarily means that crypto trading cannot resume its American-based direct exchange operations in the United States post-2021, which have reached a standstill since March.
The SEC utilized the Howey Test, a 1946 Supreme Court case benchmark, to ascertain whether the transactions in question qualified as investment contracts and should be regulated as securities under U.S. law. The findings highlighted that ShapeShift’s offerings met the criteria of being “offered and sold as investment contracts.”
In the wake of the settlement, Erik Voorhees, the founder of ShapeShift, took to social media to address the outcome. Voorhees clarified that “FOX is not a security, and nothing in the SEC settlement suggests otherwise.” He also reassured that the ShapeShift DAO and the ShapeShift.com website are unaffected, emphasizing the platform’s dedication to remaining open-source, permissionless, and private.
This settlement arrives against increased regulatory scrutiny in the cryptocurrency sector. A notable development is the U.S. District Court for the Western District of Washington’s ruling that trading crypto assets on secondary markets is considered a securities transaction. The verdict in this instance came from a case of Isawn Wahi, an exp product manager from Coinbase, who was known as the “first-ever crypto insider trading case.”
As crypto-currency regulation continuously develops in the years to come, regulation of this market must be closely followed. We provide our subscribers with such information through our newsletters so that they can make their diversified investment portfolio that stands apart from the traditional investment area in this regard.
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