Monday, June 17, 2019

U.S. Financial Regulator Makes Cryptocurrency its Top Priority for 2019

The Office of Compliance Inspections and Examinations (OCIE) of the U.S. Securities and Exchange Commission (SEC) recently released a report, where they state that the regulation of the cryptocurrency industry will be the SEC’s priority in 2019. This is to protect investors by promoting compliance, preventing fraud, and identifying & monitoring risks.

The Number of Cryptocurrency Companies Has Grown Rapidly

The OCIE states that the number of investment advisers in the financial market has been on the rise. The funds managed by them over the past year has increased to about $84 trillion. That being so, this brings a need to protect investors. OCIE also says this will be made possible by taking advantage of technology, data analysis as well as human capital.

Accordingly, products, services, and practices which pose a certain level of risks to investors as well as the U.S. capital markets as a whole will be closely monitored. In the OCIE’s opinion, this will help to achieve its mission of protecting investors through the maintenance of a fair, orderly, and efficient market.

Monitoring Cryptocurrencies, Cybersecurity, and Money Laundering

Top on the SEC’s agenda is to promote compliance with its policies. Here, the agency said they would continue to prioritize transparency from cryptocurrency companies to their investors. Moreover, certain areas such as matters related to investors, cryptocurrencies, cybersecurity, and anti-money laundering will be focused on.

In the aspect of virtual currencies, OCIE notes that the rapid growth of the market poses a risk to investors. The same is said about the number of broker-dealers and exchanges that have been launched of recent. Therefore, the offer, sale, trading, and management of virtual assets which have been classified as “securities” will be examined. This is to ensure their strict compliance with the SEC’s regulations.

SEC’s Chairman Said Industry Needs to Adhere With SEC’s Rules

Based on a report from December 5, Jay Clayton, SEC’s Chairman had said Blockchain and cryptocurrencies need to adhere with the financial regulator’s rules instead of trying to change them. However, the American attorney noted that this was only his opinion and not of the agency as a whole.

2018 is also known as the year in which the SEC made several headlines on cryptocurrency websites. Notable among them was the filing of charges against some CEOs of virtual currency exchanges which had been said to offer securities on their platform. An instance is the case of Zachary Coburn, CEO of Etherdelta who was fined in November.

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