American Regulator Goes Easy on Elon Musk While Crypto Gets Tough Treatment

ICOBox head of International PR Dima Zaitsev on differing attitudes from the SEC

For Elon Musk, it could have been much worse. He will step down as Tesla chair and pay a fine over tweets he posted about taking the firm private. However, he will remain as Chief Executive Officer of the electric vehicle company. While being removed from a role due to a tweet might seem harsh, it’s important to understand that “insiders” who have information that can affect a stock’s price must live by very strict rules of not disclosing any information through unofficial channels. People can (and do) go to jail for breaking such rules. Musk’s August 7th tweet jolted Tesla’s share price, with winning and losing consequences for those backing or betting against the firm. But even this clear violation will not result in him seeing the inside of a jail cell, while the $20m fine is like a parking ticket to a man with an estimated $23bn fortune.

Meanwhile, crypto cannot be accused of getting an easy ride from the US Securities and Exchange Commission (SEC). Even US lawmakers are now asking SEC chairman Jay Clayton to clarify when ICOs are considered securities sales. A letter from four congressmen and 11 co-signers requests that Clayton clarify how the SEC is approaching token sales, saying that “current uncertainty surrounding the treatment of offers and sales of digital tokens is hindering innovation in the United States and will ultimately drive business elsewhere.”

Even US politicians say the SEC could do more to clarify its position. People are being left to guess what the rules surrounding ICOs truly are. The penalty for misreading the smoke signals from the SEC is enforcement actions, which are never meant to be used to clarify policy. Formal guidance is what’s needed to create an environment for the development of innovative financial technologies in the United States.

So, it seems when it comes to the SEC there might be one set of rules for billionaires and another for ordinary citizens. Breaking non-existent rules is seemingly punished more harshly than breaking established ones. It all seems a bit upside down!