SEC Found a Wrong Behavior in Two Related Firms and Took Immediate Remedial Actions.

The United States financial regulators went under a strict web of procedures and have identified a violation of the rules by two related cryptocurrency firms in the last days. The main cause of this foul is Illegal off-exchange swaps.

On July 13, the U.S. Commodity Futures Trading Commission delivered immediate charges against both firms as well as SEC sent a direct announcement; an agreement that explained the whole situation, and why this misconduct happened.

The announcement says that Abra is a private company that offers an app that allows financial movements via contracts closely related to the Bitcoin blockchain.

Abra started to grow up in February 2019; giving the users the possibility of entering into contracts that provide access, complete exposure to the market, and the price movements in the U.S., as well as stocks and ex-changed funds.

The judgment is based on a shady sale to non-eligible contract participants, ones without a right and updated registration which violates the securities Act. of the United States of America. The offerings are, in fact, a violation of the exchange act by making validated transactions with the U.S and foreign retail investors completely outside the national securities exchange registrations.

The SEC accepted a sum of actions from both firms to pay for what they have done. The sanctions and civil penalty are estimated at $150.000, and maybe more.

The penalty

The respondents are being charged with a civil penalty estimated in $150.000, which includes the general cease of operations due to a violation of the commodity Exchange Act. The swaps offered to the U.S., foreign customers, and investors that do not make an appearance in the SEC registration or with a contract that breaks the codes are one of the most important violations in SEC’s policy.

What is SEC and why is it so important?

The U.S. Securities and Exchange Commission (SEC) is an agency specially created to regulate and protect investors, creating rules and laws to keep the functionality of the securities markets and the normal flow of capital formation.

The congress gave birth to this organization in 1934 and is the very first commission that regulates securities markets. The main mission of this commission is to protect investors against manipulations, fraudulent moves, and other shady or completely dark behaviors that may occur in the market.

Functions and other features.

  • The Securities and Exchange Commission (SEC) is a U.S. government oversight agency responsible for regulating the securities markets and protecting investors.
  • The SEC was established by the passage of the U.S. Securities Act of 1933 and the Securities and Exchange Act of 1934. This happened because of the stock market crash that took place in 1929 which also caused the Great Depression in the U.S. economy.
  • The SEC is in total power to take action when the law is broken by any cause. It can work in parallel with the justice department of criminal cases to make the misconduct be repaired and the lawbreakers punished. It also can bring civil actions against lawbreakers.

by Jenson Nuñez


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