SEC

What is SEC?

The SEC is the US federal agency that regulates securities markets, enforces disclosure requirements, and investigates fraud. In crypto, it asserts jurisdiction over tokens it classifies as securities.

How does SEC work?

1. It requires registration of securities and exchanges.
2. It mandates public disclosures from issuers.
3. It investigates potential fraud and market manipulation.
4. It brings enforcement actions, imposing fines and halting trading.

Why does SEC matter?

SEC enforcement defines which crypto projects can legally operate in the US. Tokens classified as unregistered securities face enforcement actions that can shut down projects overnight.

Key features of SEC

• US federal securities regulator with broad enforcement powers
• Can freeze funds, halt trading, and force refunds
• Claims jurisdiction over many crypto tokens as unregistered securities
• Works alongside CFTC and FinCEN on digital asset oversight

Examples of SEC

The SEC sued Ripple over XRP, alleging it was an unregistered security. It investigated Coinbase for allegedly offering unregistered securities.

Bitcoin ETFs required years of SEC review before approval.