In an effort to reduce the growing number of sue cases among crypto and FinTech Startups when they break the law, the U.S. Securities and Exchange Commission has yesterday published on their website the launch of a new service believing that it will help reduce the vast number of cases that lead most startups to court.
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.
SEC’s Senior Advisor for Digital Assets and Innovation, Valerie A. Szczepanik, in a speech stated that:
by launching FinHub, we hope to provide a clear path for entrepreneurs, developers, and their advisers to engage with SEC staff, seek input, and test ideas.
On the other hand, Jay Clayton, SEC’s Chairman dropped the statement below👇
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, 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. A service such as the FinHub isn’t a magic cure against future noncompliance, but education and assistance can only help.