Billion-Dollar Crypto Fund Pantera Capital Says 25% of ICOs in its Fund Could be Securities
In a publication to customers delivered on Thursday, Pantera Capital CEO Dan Morehead disclosed that one in four initial coin offering (ICO) projects that the company has invested in might be regarded as securities under U.S. regulations.
“While we believe the vast majority of the projects in our portfolio should not be affected, approximately 25 percent of our fund’s capital is invested in projects with liquid tokens that sold to U.S. investors without using regulation D or regulation S. If any of these projects are deemed to be securities, the SEC’s position could adversely affect them. Of these projects, about a third (approximately 10 percent of the portfolio) are live and functional and, while they could technically continue without further development, ending development would hinder their progress.”
Back in April, Bloomberg reported that Pantera Capital had more than $1 billion in its own finance as the very first recorded billion-dollar hedge fund at the cryptocurrency marketplace.
At the moment, on Bloomberg Television Thursday, Morehead disclosed the company’s single biggest investment has been ICON, South Korea’s biggest blockchain project, also that it has approximately 10% of its funds spent in Bitcoin (BTC).
Since January, but the value of ICO projects and tokens has diminished substantially. ICON, that has been working together with the authorities of Seoul to use the blockchain in several government-supported systems, found a fall in $4.4 billion at its summit to $89 million, with 98 percent.
The value of the majority of ICO projects and blockchain networks has diminished by the assortment of 95 to 99% from the U.S. dollar in the previous 12 months, largely because of increasing regulatory pressure in the U.S. Securities and Exchange Commission (SEC) and the battle of decentralized software (dApps) to drive mainstream adoption.
Among those ICO projects Pantera spent in, Paragon, already reached a settlement with the SEC on November 16, since the first instance of SEC registration cost settlement in crypto. Paragon was asked to enroll its own token because of security, cover penalties, and file regular reports with the SEC.
“We have made it clear that companies that issue securities through ICOs are required to comply with existing statutes and rules governing the registration of securities. These cases tell those who are considering taking similar actions that we continue to be on the lookout for violations of the federal securities laws with respect to digital assets.”
Since SEC co-director Avakian highlighted, ICOs are needed to comply with existing regulations, and many ICOs have gone through the appropriate actions to make sure its compliance with U.S. regulations.
The ERC20 tokens listed by Coinbase are usually regarded as non-securities awarded the exchange’s statement printed in May that specifically described its purpose to simply record crypto assets which are compliant with present regulations.
Pantera Capital’s evaluation of its investments also shows the potential for segregating safety exemptions to non-security tokens together with all the ruler that the SEC has provided before this year.