The SEC has subpoenaed at least 3 crypto VC firms, requesting they provide all contracts pertaining to token deals they have conducted, according to a report from DL News.
However, the 3 subpoenaed VC firms were not named in the report.
One subpoena, titled âIn the matter of certain crypto asset offering intermediaries,â was viewed by DL News, and shows that the SEC is investigating potential VC firms violations of federal securities laws.
The report does not name any of the specific firms being targeted by the SEC action. A 2022 report from The Information on planned SEC action reported that the âmost prolific of these investors, such as Andreessen Horowitz and Paradigm, would be the likeliest to get requests for information from the SEC, lawyers said.â
The SEC is focusing on whether crypto VCs are acting as âstatutory underwriters,â which involves distributing securities to the public without proper registration.
A securities attorney noted that this focus on VCs is a ânatural additional enforcement areaâ for the SEC.
Despite broad criticism of the SECâs war on the crypto industry, itâs clear the agency is continuing to aggressively pursue cases against the full spectrum of industry players.Â
The dynamic the SEC looks to be investigating is whether VC firms are effectively marketing tokens to the public, âpoisoning the initial issuance.âÂ
Given the interplay of market makers, venture funds, and other financial actors in crypto, it is not hard to imagine the extent of this investigation deepening beyond the initial three unnamed VC firms who have received subpoenas.