SEC Creating an Investment Plan Blueprint for Crypto?

The SEC has not been very friendly toward crypto, but the tide may be shifting. There are reports indicating that the SEC is planning to create an investment scheme for investment companies and small investors and as a result, it may lead to new developments in the crypto realm as well.

With an investment scheme in place, the SEC will be able to ensure that there are safeguards for those who have access to the private markets. SEC Chief Jay Clayton stated,

“The private markets are awash in capital these days. The question is, who is participating?”

Clayton further added,

“It came from doing the job and recognizing that, for real investors, the opportunity set beyond the public market is pretty low, pretty costly and pretty risky. But people want that.”

Currently, the plan is aimed at opening up opportunity for investment in retailers, such as Uber, SpaceX, and Airbnb. These are “big-money” companies that many private investors currently do not have access to. Rather, the rules only allow wealthy and accredited investors to participate in such companies’ securities offerings and the paperwork to participate can be onerous as well.

In 2017, private companies raised over $448 billion, according to a recent McKinsey study. And 91% of partners claimed returns on private investors were better than those of publicly listed companies.

The potential change may be coming at the right time too. Current studies show that millennials are becoming more interested in investment, especially in the crypto market. If younger investors continue to push, the whole industry could be impacted. After all, SEC’s goal is to protect investors, and in this case, it would certainly be valuable to ensure that there are safeguards in place for younger individuals.

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