WSJ: SEC To Examine Up To 100 Crypto-Related Hedge Funds

The US Securities and Exchange Commission (SEC) is preparing to examine up to 100 hedge funds that deal with cryptocurrencies, a person familiar with the matter told WSJ March 22.

The initiative is separate from the dozens of cryptocurrency probes, which mainly target companies the SEC suspects of running afoul of securities laws via Initial Coin Offerings(ICO).

While examiners will report any suspicious activity uncovered in the course of their examinations, the main purpose of the initiative is to inform how the commission’s policies should address cryptocurrencies, the source told WSJ.

Marc Elovitz, a partner at Schulte Roth & Zabel LLP, a firm which advises hedge funds, said that, “This is a way for the SEC overall to gather information and learn about important new technology and products.” Examiners conduct these types of operations “to educate the commission overall about new businesses or new industries.”

The operation will begin in the next two months, the source tells WSJ. Examiners will inspect whether the assets bought by fund managers match those which they advertised to investors in disclosure documents…

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