The office of the Secretary-General of the Commonwealth of Massachusetts, which oversees the State Securities and Markets Authority, has reportedly formed a fintech advisory group, American Banker reports on March 7.
Secretary General William Gavin’s office has reportedly formed a group comprised of representatives of the Eastern Bank in Boston, a blockchain company called Arwen, academics, lawyers and other firms.
The group will focus on developments in the fintech industry, including digital currencies. Gavin said:
“This working group includes key players from a wide range of fintech communities, from innovation centers to startups to financial institutions. This collaboration will help securities regulators meet the new demands of this fast-growing area”.
Sharon Goldberg, the CEO of Arwen, told American Banker that the purpose of the group is not just to fight illegal companies, but to bring clarity to the fintech companies:
“Personally, I would not do that if anything that resulted would be more enforcement. Enforcement measures are fine, but first we need to know what the rules are”.
About the law
Goldberg added that companies can incur significant costs if they make sure that they do not violate the law. “It’s very difficult because you fear that you will violate a rule and may not know what that rule is”.
Ethan Silver, chairman of Lowenstein Sandler broker-dealers, reportedly said that many fintech companies hire teams of lawyers and consultants to ensure that they do not accidentally violate laws.
Secretary General Gavin has been critical of cryptocurrencies like Bitcoin
In December 2017, he said Bitcoin was a bubble that would ultimately become a “worthless product.” Gavin also said that Blockchain is an emerging technology that is subject to “change, error or criminal activity,” and Bitcoin’s “fertile ground” is for investment and other financial fraud”.
In March 2018, Gavin issued approval orders requesting the permanent suspension of five Initial Coin Offerings (ICOs), stating that the companies were selling unlicensed securities. The Massachusetts Securities Division ordered ICO issuers to send letters of resignation to investors and repay the money within 45 days of the order.