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BLOCKCHAIN
SEC launches hub to educate and assist fintech startups
In a departure from simply suing startups when they break the law, the U.S. Securities and Exchange Commission has launched a new service to educate and assist financial technology companies so it can avoid having to take them to court later.
Called the Strategic Hub for Innovation and Financial Technology, or FinHub for short, the service has been established as a resource for public engagement on fintech-related issues and initiatives. Areas covered by the hub include distributed ledger technology and digital assets, automated investment advice, digital marketplace financing (initial coin offerings) and artificial intelligence and machine learning.
The SEC said FinHub brings together a number of existing working groups within the SEC that have been focused on similar issues, providing a one-stop location for the industry to communicate with the SEC and to obtain information. Sounding more like a startup hub than a government outlet, FinHub will also offer publications and events including a FinTech Forum focusing on distributed ledger technology and digital assets planned for 2019.
“The SEC is committed to working with investors and market participants on new approaches to capital formation, market structure and financial services, with an eye toward enhancing, and in no way reducing, investor protection,” SEC Chairman Jay Clayton said in a statement. “The FinHub provides a central point of focus for our efforts to monitor and engage on innovations in the securities markets that hold promise, but which also require a flexible, prompt regulatory response to execute our mission.”
Anything that assists the fintech industry in avoiding legal noncompliance no doubt will be welcome. Although ICOs have dropped off in number this year as blockchain companies switch back to traditional venture capital raising, the regulatory issues remain.
Since the SEC ruled that ICOs are subject to securities law in July 2017, it has pursued numerous cases against companies using them. While most were cases of outright fraud, others were also sued for legal noncompliance. A service such as the FinHub isn’t a magic cure against future noncompliance, but education and assistance can only help.
Image: SEC
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