What is SEC? And Why is it after Crypto?

The U.S. Securities and Exchange Commission, commonly known as SEC, is a federal agency that regulates the securities industry, enforces federal securities laws, and safeguards the interests of investors. SEC oversees various entities, such as publicly traded companies, investment firms, securities brokers and dealers, and self-regulatory organizations like stock exchanges.

SEC was established in the 1930s after the largest economic crisis in US history, known as the “Great Depression.” The US government established the SEC with the aim of promoting transparency and fairness in securities activities, and preventing fraudulent activities. The regulations implemented by the SEC required companies to provide comprehensive and transparent financial reports, register new securities with the SEC before selling them in the market, and adhere to disclosure and distribution regulations. Furthermore, the SEC was given legal authority to oversee the supervision of the securities market and related activities.

Some of the key roles of SEC are summarised below:

• Regulating the Securities Industry: The SEC is responsible for regulating the securities industry in the United States. This involves setting rules and regulations for various entities in the industry, including public companies, investment firms, and securities brokers and dealers. By regulating the industry, the SEC aims to promote transparency, fairness, and accountability in the securities markets as mentioned before.
• Enforcing Federal Securities Laws: The SEC is also responsible for enforcing federal securities laws, such as the Securities Act of 1933 and the Securities Exchange Act of 1934. This involves investigating and prosecuting individuals and entities that violate securities laws, such as those engaged in insider trading or accounting fraud.
• Safeguarding the Interests of Investors: One of the key roles of the SEC is to safeguard the interests of investors. This involves ensuring that investors have access to accurate and reliable information about the companies and securities they invest in. The SEC also works to prevent fraudulent and deceptive practices in the securities markets, and to promote fair and orderly trading in these markets.
• Overseeing Various Entities: The SEC oversees a wide range of entities in the securities industry, including publicly traded companies, investment firms, securities brokers and dealers, and self-regulatory organizations like stock exchanges. The SEC sets rules and regulations for these entities, and monitors their compliance with these rules and regulations.

Why Crypto needs to be careful?

Given the capacity of SEC and the power it yields, every security issuing industry needs to be aware of the protocols and standards set by this authority. While crypto has enjoyed its decentralised status for years, it has not truly escaped the clutches of SEC. In past years, many legal battles have been charged by the SEC against different cryptocurrencies. Perhaps the most highlighted one is Ripple v SEC. Recently, SEC was also after staking, a key factor in Crypto's growth. What does this mean for the future of crypto? Are we to lose our decentralised status because of the involvement of SEC? Or is blockchain too powerful to be affected by such threats?