SEC Wants U.S Cryptocurrency Exchanges To Get Registered With Them
On Wednesday, March 7, the U.S Securities and Exchange Commission (SEC) issued a public statement on “Potentially Unlawful Online Platforms for Trading Digital Assets” saying that all the digital currency trading platforms which meet the definition of a security should register themselves with the agency.
The SEC said that all the rules which are applied to traditional exchanges shall be applied even to cryptocurrency exchanges. The commission said that "If a platform offers trading of digital assets that are securities and operates as an 'exchange,' as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”
The SEC has put s stern warning that many online trading platforms which refers to themselves as exchanges are currently unregulated. “The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not,” said the SEC.
The SEC in the statement has clearly mentioned that some of the unlawful trading platforms take the undue advantage of establishing their own rules and standards while dealing with digital assets, which are not endorsed or approved by the agency.
In this statement, the SEC has also made clear that all those entities which are willing to operate as Alternate Trading System (ATS) will also be subjected to regulatory requirements. Exchanges of such kind should register as a broker-dealer and should also become the member of self-regulatory organization (SRO).
The SEC wrote: “Registration as a broker-dealer subjects the ATS to a host of regulatory requirements, such as the requirement to have reasonable policies and procedures to prevent the misuse of material non-public information, books and records requirements, and financial responsibility rules, including, as applicable, requirements concerning the safeguarding and custody of customer funds and securities.”
Apart from just the online trading platform the SEC also pinpoints other “digital wallet services” who are holding or storing digital services to get themselves registered. The statement reads that “These (trading exchanges) and other services offered by platforms may trigger other registration requirements under the federal securities laws, including broker-dealer, transfer agent, or clearing agency registration, among other things.”
Last month during a Senate Hearing, SEC Chairman Jay Clayton said that he is working along with the Congress to discuss whether there is a need for increased regulation for the digital trading platforms.
It remains to be seen as to how swiftly the SEC passes an order to the exchanges.