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BY CNA Team - October 1, 2018

News 0

Arrington gives up on US startups after second subpoena

Michael Arrington says he’s pivoting to Asia
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Arrington XRP Capital’s decision to no longer invest in US blockchain startups has wider implications as many see US regulators dragging their feet by not providing clarity an obstacle to innovations.

Michael Arrington, a partner and founder of the hedge fund manager specialising in crypto assets says in a Sept 28 tweet that the firm will no longer invest in US startups after receiving a second subpoena from the US Securities and Exchange Commission (SEC).

“The legal costs of dealing with these are not insignificant. We will not invest in any further US deals until the SEC clarifies token rules. Pivot to Asia,” he adds.

The reactions to his tweet ranged from those pointing out that the US was losing out in the technology race to those noting that it investing in startups is not easy because of the uncertainties surrounding the rules.

One person says that even with good legal attention to detail, the rules or lack thereof, has made it harder to navigate.

Another say that US investors are increasingly shut out from blockchain projects because of the fear of getting penalised.

Incidentally, last week a group of US lawmakers wrote a letter to SEC chairman Jay Clayton asking for clarifications over cryptocurrencies and initial coin offerings (ICOs).

They pointed out that recent enforcement actions have caused a lot of uncertainty for the development of innovative technologies.

The lawmakers asked Clayton whether the SEC can analyse again separately those tokens sold as securities that may possibly turn out to be non-securities.

In contrast, Arrington’s reference to Asia shows how much more

Arrington has gone on record before to say that the crypto space should not be regulated but if there was going to be regulation, then the SEC needed to get it right and needed to get it done faster.

A Massachusetts district court ruled last week that for the purposes of the My Big Coin Pay case, all cryptos are commodities.

ICORating’s second quarter ended June 30 report on ICOs showed that North America was still the leading region in terms of funds raised but that Asia showed a 20% increase in funds raised compared to the same quarter a year ago, although from fewer projects.

Overall, Malta, Gibraltar and Singapore topped the list based on median amount of funds raised.

Image courtesy of Arrington XRP Capital website.





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