°The SEC is the U.S. regulator that protects investors and oversees the securities markets.

°The organization was created after the 1929 stock market crash to restore confidence in the financial markets.

°The SEC requires transparent reporting from companies and takes action against fraud and misleading information.

°In the crypto market the SEC determines when tokens count as securities and therefore fall under strict regulation.

°Under chairman Paul Atkins the focus is shifting from enforcement to clearer regulations for digital assets.

📍How was the SEC formed?

The SEC was founded in 1934 as a result of the stock market crash of 1929. This crash showed that more oversight and stricter rules were needed to restore confidence in the financial markets. President Franklin D. Roosevelt gave the SEC a clear mission: protect investors, promote fair and efficient markets and enable capital formation. Since its founding, the agency has consisted of a five-member commission appointed for five-year terms.

📍What does the SEC actually do?

The SEC ensures transparency and protection in the financial markets. Public companies must regularly submit financial reports so that investors have access to accurate and reliable information. Individuals or entities holding more than 5% of the shares of a publicly traded company must also report this to the SEC. The SEC also reviews market products such as ETFs and handles applications from companies wanting to go public. When companies or individuals fail to comply with securities law, the SEC can take action ranging from investigations to lawsuits.

📍The role of the SEC in the crypto market

In recent years the SEC has taken on an increasingly important role in the crypto market. The regulator determines, for example, when a crypto project, token or ICO counts as a security. If it does, the project must comply with the same rules as traditional securities, such as registration requirements and disclosure obligations. The SEC can take action when ICOs fail to follow these rules or when crypto projects spread misleading information.

The Howey test is an important tool used by the SEC. It is a legal standard that determines whether a transaction is a security. It looks at the investment of money, the involvement in a common enterprise, the expectation of profit and whether that profit comes from the efforts of others. If a crypto asset meets these criteria, the SEC can apply oversight.