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The SEC has appointed a regional director to oversee the crypto industry in Texas

In the escalating crackdown on cryptocurrency, the Securities and Exchange Commission has appointed Eric Werner as its regional director for Fort Worth. He would oversee not only Texas, but a broad section of the western and southwestern United States.

Cryptocurrencies are digital assets that use cryptography to secure transactions and control the creation of new units. It is decentralized and operates independently of central banks and governments. Thus, it makes it very attractive to people who are looking for an alternative to traditional financing.

While cryptocurrencies have gained popularity, they have also raised concerns among regulators and policymakers. One of the problems is that cryptocurrencies are used for illegal activities. Such as money laundering and terrorist financing, because of the anonymity and lack of regulation.

clamp down on the industry

To address these concerns, the Securities and Exchange Commission (SEC) has taken a more active role in regulating cryptocurrencies in recent years. In 2017 and the years since, the Securities and Exchange Commission (SEC) has taken the hard line that certain cryptocurrencies, like Bitcoin, must be treated as securities under federal law.

This means that they are subject to the same regulations as traditional securities, such as stocks and bonds. Since then, the Securities and Exchange Commission (SEC) has taken numerous enforcement actions against cryptocurrency players it believes have violated securities laws.

Also, since 2018, the commission has been targeting token sales and ICOs. A form of fundraising in cryptocurrency, which the agency considers unregistered securities sales. The Securities and Exchange Commission, chaired by Chairman Gary Gensler, ramped up the crackdown. Gensler has announced that he believes every currency and token, other than Bitcoin, is an unregistered security.

Add firepower

The SEC’s regional directors oversee the agency’s enforcement and regulatory activities in their regions. Eric Werner, who has over 20 years of experience in securities enforcement, will lead now A wide swath of the western and southwestern United States. Including Texas, which is home to many cryptocurrency companies.

“I am delighted that Eric will head the regional office in Fort Worth,” said Gary Gensler, SEC President. “In this new position, Eric will draw on a broad range of experience gained from more than 25 years with the SEC. I also want to thank Marshall Gandy for his work as Acting Associate Director and for his continued work with the SEC.”

The appointment comes amid an escalating crackdown on cryptocurrencies across America. Given the hostile conditions across the country, this latest development is unlikely to improve relations. Time will tell how Eric Werner’s appointment affects SEC enforcement activities in the cryptocurrency industry.

On the one hand, given his extensive experience in securities enforcement, it is likely that he will continue to prioritize the agency’s mission. Mainly to protect investors and maintain the integrity of the stock market. However, the other half can hinder growth and innovation.

Werner cut his teeth during Jay Clayton’s tenure at the Securities and Exchange Commission. He has described How Clayton first met in 2018 when the latter was having a heated argument about cryptocurrency and how to regulate it. Fast forward to 2022, when the new director played a role in a highly publicized SEC enforcement action against crypto assets.

Decisive actions

Last October, Werner Ashraf A highly publicized Securities and Exchange Commission (SEC) enforcement action against what the agency called an offering of a “fraudulent and unregistered” crypto asset directed at Latino investors. Here, the SEC used emergency action to shut down the offering and take legal action against those involved.

CryptoFX, a Texas firm run by Mauricio Chavez and Giorgio Benvenuto, has faced regulatory pressure. The official watchdog has accused the company and its owners of violating securities laws by fraudulently soliciting funds from inexperienced investors using the allure of cryptocurrency.

They allegedly got $12 million in digital currency Ponzi, and spent a lot of money on a lavish lifestyle. The SEC alleged that CryptoFX falsely promised high returns and misled investors about the risks involved in their investment strategy.

It should be noted that the SEC’s use of an emergency procedure here is not without precedent. The agency has used emergency procedures in several high-profile cases. Including actions against Telegram and an Initial Coin Offering (ICO).

final steps

The previous month, the US regulator announce Emergency action against investment advisor BKCoin Management over an alleged fraud scheme. Here, the Miami-based company has raised $100 million from at least 55 investors, presumably to get into the cryptocurrency. Instead, they were alleged to have used the money to splurge on luxury goods and make “Ponzi-like payments”.

The SEC can use emergency procedures to shut down fraudulent or illegal activities that threaten investors, even without first providing the parties with notice and an opportunity to be heard. This is known as an emergency cease and desist order.

In the case of the above fraudulent and unregistered crypto-asset offering, the SEC used emergency action to close the offering and pursue legal action against the individuals or companies involved.

Emergency procedures are a tool that can help protect investors in extreme situations. However, it can be highly controversial, as the parties involved will want to contest the claims before making the order.

Fears brewing in Texas?

Some in the crypto industry want Texas to become a hub for cryptocurrency. Is Werner’s appointment an attempt to kill the children’s industry in the bud? What can investors in West and Southwest expect from Werner after his upgrade? Will there be more emergency measures? These are just some of the questions that appear after the last date.

The blockchain industry has called for Texas to become a hub for cryptocurrency and other emerging technologies. This has been demonstrated in recent legislative proposals and actions by state officials, such as Governor Greg Abbott in March 2021 expressing his support for cryptocurrency and blockchain technology innovation in Texas. In the first class Catering for miners.

Texas is known as a business-friendly state, with a low tax burden and growth-friendly environment that attracts entrepreneurs and investors. These factors, along with the country’s technology infrastructure and favorable regulatory environment, make it an attractive location for blockchain companies looking to establish a presence in the United States.

Moreover, Texas has several universities that have strong computer science and engineering programs. This can provide a pool of talented graduates with the skills to support the growing blockchain industry.

However, as with any emerging technology, cryptocurrencies and blockchain pose risks and challenges. Such as regulatory hurdles and the need to protect consumers from fraud and other abuse. As such, any efforts to establish Texas as a cryptocurrency and blockchain hub must be carefully balanced with effective regulation and consumer protection measures. This is where the SEC can infiltrate the crypto network using emergency procedures. One way to bypass any remaining legal boundaries and act like an authoritarian state agency.

BeInCrypto contacted Eric Werner’s office but did not receive a response as this article was published.

I look forward

In general, it is difficult to predict the future actions of the SEC and regulators. However, one may note that regulators such as the SEC have a mandate to protect investors and maintain fair and efficient markets. In the case of cryptocurrencies, there are concerns about fraud, manipulation, and other misconduct. which the Securities and Exchange Commission is responsible for addressing.

While some may view emergency measures as overstepping legal bounds, or as authoritarian, such measures are usually for situations where there is an imminent threat to investors or markets and insufficient time to follow standard rule-setting procedures.

Emergency procedures are also subject to legal review and can be challenged in court if they are found to be unsupported by law or outside the agency’s legal authority.

Disclaimer

Following the Trust Project’s guidelines, this featured article features opinions and perspectives from industry or individual experts. BeInCrypto is dedicated to transparent reporting, but the opinions expressed in this article do not necessarily reflect those of BeInCrypto or its employees. Readers should independently verify information and consult with a professional before making decisions based on this content.

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