Altcoin News: SEC Is Considering the Need to Regulate Facebook Cryptocurrency

July 15, 2019, by Marko Vidrih on ALTCOIN MAGAZINE

The US Securities and Exchange Commission (SEC) studies the structure of the Libra cryptocurrency presented by Facebook to determine whether it has signs of an exchange-traded fund (ETF), writes The Wall Street Journal referring to sources familiar with the situation.

If Libra is recognized as an ETF, Facebook will have to contact the SEC for permission to launch it.

According to the WSJ, Facebook has previously contacted the SEC on this issue, but representatives of both sides do not comment on the situation. According to sources, even before the official announcement of Libra, the social network turned to a number of analytical centers, which, under the conditions of non-disclosure of information, were invited to familiarize themselves with a certain project.

Managing Director of ETF.com Dave Nadig believes that the principles of Libra’s operation described in the white paper really make the tool look like an ETF. Facebook says it will use a basket of real assets, including bank deposits and government securities. The company also intends to attract “authorized resellers” to ensure the stability of the Libra course.

The ETF uses large securities dealers, called “authorized participants”, who similarly buy and sell large blocks of securities directly through the fund and maintain its value close to the rate of the securities held in it.

“Regulators will always study the structures that they are currently regulating. When a new tool is offered, the regulator needs to figure out whether it is like something that it already regulates,” said ETF expert at the law firm Thompson Hine Bibb Strench.

Author: Marko Vidrih