The US Securities and Exchange Commission (SEC) has reportedly subpoenaed at least three crypto venture capital firms in 2024.
Citing a source familiar with the matter who wished to remain anonymous, DL News reports that three crypto VC firms have received identical subpoenas from the SEC asking every token contract involves investors.
“The U.S. Securities and Exchange Commission staff is conducting an investigation regarding the above matter to determine whether violations of the federal securities laws may have occurred.”
The source close to the matter says the SEC is investigating whether crypto venture capital firms act as legal underwriters – entities that buy digital assets with the intention of reselling them to the public.
Venture capital firms often invest in digital asset startups and are rewarded with the projects’ tokens. In most cases, some tokens are released upon investment, while more are released through scheduled unlocks.
New crypto projects are allowed by the SEC to sell unregistered securities in the form of tokens to accredited investors, meaning they can sell their coins to venture capital firms, but not to the general public.
“The accredited investor concept identifies investors who are eligible to participate in the offering of unregistered and illiquid securities.”
The SEC appears to be investigating whether crypto VC firms are acting as agents participating in the public sale and release of unregistered securities.
Says the source,
“It poisons the first issue.”
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