The cryptocurrency world brought the Securities and Exchange Commission’s investigation onto itself, said Paul Vigna, reporter at the Wall Street Journal and author of “The Truth Machine.”

The scale and speed at which the entire market has grown, with billions of dollars flooding into the space for “sketchy” products created a situation that “was going to bring in regulators, no matter what,” he explained.

“I don’t think they’re being particularly draconian. I think they’re being honest in that they’re trying to figure out what is happening in this market, what it is, and how to draw the lines around it.”

Last month, Vigna reported that the SEC had sent out dozens of subpoenas and information requests for companies involved in Initial Coin Offerings, or ICOs.

In December, the commission also issued a statement urging caution and skepticism among investors, saying there is “substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation.”

The SEC’s caution comes against a backdrop of an increasing number of social media networks, from Facebook and Google to Reddit and Twitter, cracking down on cryptocurrency ads.

In recent months, the amount raised in ICOs has lessened, but Vigna says that’s not the metric to watch.

“The real trend to look for is to see where the money is going rather than the totals. Is the money going to more high-quality projects...that seem to have some chance of building something?

“Last year, was just a lot of indiscriminate spending,” he explained. “I think you’re going to see a lot more thoughtful invest[ing] this year.”

For the full interview, click here.