bitcoin20180402_22.txt

 SAN FRANCISCO — The Securities and Exchange Commission has sent subpoenas to dozens of people and companies behind the rise of so-called initial coin offerings, a clear sign of the agency’s desire to rein in the popular new fund-raising method. Over the last few months, the commission has asked for information from companies that have sold new virtual currencies to raise money for their projects, as well as advisory firms and lawyers who have helped with these sales, according to four people who have seen some of the subpoenas. The people asked not to be identified because the subpoenas are part of confidential legal negotiations. The demands for information began last year, and companies have continued receiving them in recent months, the four people said. Nick Morgan, a former lawyer in the S.E.C.’s enforcement division, said that according to his contacts in the industry, the subpoenas had gone out to as many as 80 companies and individuals. Mr. Morgan, who is now a lawyer at the Paul Hastings firm, said those numbers would make this one of the broader regulatory sweeps he had seen. The S.E.C. had no comment on the subpoenas, which were first reported on Wednesday by The Wall Street Journal. Coin offerings are a way for start-ups or online projects to raise money without selling stock or going to venture capitalists. The money is raised by creating and selling a virtual currency, generally with rules similar to well-known virtual currencies like Bitcoin. The demands for information are the most concrete sign of the S.E.C.’s intention to crack down on the sudden emergence of coin offerings. Companies raised over $5 billion through coin offerings in 2017, according to the news and data site Coindesk. Jay Clayton, the chairman of the S.E.C., has said on several occasions that most of the virtual currencies that have been sold should have been categorized as securities and registered with regulators, which few companies have done. Companies have been able to get around regulatory checks because they have collected the money in Bitcoin and other virtual currencies, which can be sent without going through any banks or other middlemen that might look into the legality of the transactions. In January, Mr. Clayton said he had asked his agency to go after both the companies that sold virtual currencies and the “gatekeepers” that helped them. “Market professionals, especially gatekeepers, need to act responsibly and hold themselves to high standards,” he said in the speech at the Securities Regulation Institute. “To be blunt, from what I have seen recently, particularly in the initial coin offering space, they can do better.” The S.E.C. has already brought cases against a few small companies that have sold virtual currencies. But the subpoenas are the first concrete sign of a broader regulatory push. In a sign of the breadth of the agency’s effort, the subpoenas have been sent out by S.E.C. offices in multiple cities, including Boston, San Francisco and New York, according to the four people who have seen the subpoenas. The subpoenas have asked companies for a wide array of information about the virtual currencies they have sold, including the information used to market the digital tokens and the identity of the investors who bought them, the people who saw the subpoenas said.