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SEC Reportedly Taking Aim at Crypto VC Firms
The 3 subpoenaed VC firms were not named in the report from DL News.
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The SEC has subpoenaed at least 3 VCs, requesting they provide all contracts pertaining to token deals they have conducted, according to a report from DL News.
What's the scoop?
- Subpoena Details: One subpoena, titled "In the matter of certain crypto asset offering intermediaries," was viewed by DL News, and shows the SEC is investigating potential VC firm violations of federal securities laws.
- Undisclosed Targets: DL News did not name any of the specific firms being targeted by the SEC action. A 2022 report from The Information on planned SEC action reported that the "most prolific of these investors, such as Andreessen Horowitz and Paradigm, would be the likeliest to get requests for information from the SEC, lawyers said."
- Focus on Statutory Underwriters: The SEC is focusing on whether crypto VCs are acting as "statutory underwriters," which involves distributing securities to the public without proper registration.
- Legal Perspective: A securities attorney noted that this focus on VCs is a "natural additional enforcement area" for the SEC.
Bankless Take:
Despite broad criticism of the SEC's war on the crypto industry, it's clear the agency is continuing to aggressively pursue cases against the full spectrum of industry players. The dynamic the SEC looks to be investigating is whether VCs are effectively marketing tokens to the public, “poisoning the initial issuance.” Given the interplay of market makers, venture funds, and other financial actors in crypto, it is not hard to imagine the extent of this investigation deepening beyond the initial three unnamed VCs who have received subpoenas.