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The SEC has added a handful of “misleading” crypto trading firms to its list of unregistered entities.
In its press release, the SEC made it very clear that the Public Alert: Unregistered Soliciting Entities (PAUSE) list is meant only as a warning to investors and does not imply the firms on the list have violated U.S. securities laws.
The list itself was launched in 2007 and includes the likes of “SuperBinance” and “Superfxtrading,” so named to take advantage of investors confusing them with Binance and FTX. There’s even a “Gemini M&A” impersonating the Goldman Sachs mergers and acquisition deal making app, Gemini.
Monday’s recent additions, which include “Bittrade Capitals,” “247Crypto Trade,” and “Bitpayfxpro,” have all been cited for using “misleading information to solicit primarily non-U.S. investors.”
Among the other crypto firms on the list: SuperBinance, Superfxtrading, Crypto-Trading Hub, Cryptobravos, Crypto Forex Trading Ltd, Cryptofxearners, Cryptoprofits, Inc., Xcryptodoubler, and BTC Investments.
Firms wind up on the list for “providing inaccurate information about their affiliation, location, or registration,” the SEC said in a press release. But even with companies like SuperBinance, the SEC is reluctant to acknowledge that it’s looking to benefit from being confused with the largest crypto exchange by volume.
Take “Bitpayfxpro,” for example. Going by the name alone, it could be confused with BitPay, the Atlanta-based Bitcoin payments processor that was founded in 2011. But rather than being listed as an impersonator of a genuine firm, the SEC calls it an unlicensed soliciting entity.
The SEC has famously waffled on whether cryptocurrencies like Bitcoin and Ethereum qualify as securities. William Hinman, the director of the SEC’s division of corporation finance, unequivocally said BTC and ETH, specifically, were not securities in 2017. More recently, SEC Chair Gary Gensler has taken the stance that many crypto assets currently trading in the market “may be unregistered securities, without required disclosures or market oversight.”
The SEC’s definition of an established firm can be murky. FTX—the Bahamas-based parent company, not FTX.US—has a CIK (central index key) identifier registered with the SEC. Even so, it’s not considered a “genuine firm” by the regulator. As of this writing, that CIK paperwork, which acts as an account number, is the only filing FTX has with the SEC.
"With publication of the PAUSE list, the Commission continues to take action to protect retail investors," said Jose M. Rodriguez, acting chief of the SEC’s office of market intelligence.