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For the first time, the Securities and Exchange Commission (SEC) has moved against a cryptocurrency hedge fund for violating securities law.

On Tuesday, the SEC charged a $200,000 fine to Crypto Asset Management and its founder, Timothy Enneking, for running a U.S.-based fund without proper regulatory approval. In addition to the fine, the SEC issued a cease-and-desist letter to immediately halt all activities.

Enneking had reportedly collected $3.6 million from 44 investors and managed more than $36 million in digital assets at the end of 2017. However, the La Jolla, California-based fund failed to register with the Commission in any capacity, according to the SEC.

According to filings, Crypto Asset Management also negligently misrepresented to actual and prospective investors that it was the “first regulated crypto asset fund in the United States,” while claiming that it had registered with the SEC.

In a statement provided to CNBC, Enneking emphasized that this is “old news” and that the firm moved quickly to comply with SEC orders.

We have been fully in compliance with the SEC since shortly after they let us know they had concerns about two passages on our website

The news comes the same day as a federal judge ruled that two fraudulent ICOs would be classified as securities in order to be prosecuted under the federal criminal law. Taken together, it looks as if U.S. regulators are moving to further scrutinize cryptocurrency entities under securities laws in an apparent effort to set a precedent.

More: SEC takes first action against a crypto hedge fund
Similar: U.S. Federal Judge Rules Two ICOs Fall Under Securities Laws

Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.

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