The US regulator, Securities Exchange Commission (SEC) has listed cryptocurrencies under “examination” priorities, which mean top priority in 2019. According to the SEC’s Office of Compliance Inspections and Examinations (OCIE), it has been done in order to protect the retail and small investors from this nascent asset class.
Under market activities of OCIE, it monitors offer and sale, trading, and management of digital assets. The goal of SEC will be to ensure regulatory compliance and going forward, market participants can expect greater scrutiny from the OCIE. In its statement, OCIE said
“OCIE will take steps to identify market participants offering, selling, trading, and managing these products or considering or actively seeking to offer these products and then assess the extent of their activities. For firms actively engaged in the digital asset market, OCIE will conduct examinations focused on, among other things, portfolio management of digital assets, trading, safety of client funds and assets, pricing of client portfolios, compliance, and internal controls.”
The year 2018 was not much positive for the crypto industry due to a regulatory crackdown and series of Bitcoin ETF rejection by the SEC, which further dampened the mood of the market. And, last year too, it was in the examination priority list of OCIE, but nothing concrete happened. In its 2018, it mentioned:
“Areas of focus will include, among other things, whether financial professionals maintain adequate controls and safeguards to protect these assets from theft or misappropriation, and whether financial professionals are providing investors with disclosure about the risks associated with these investments, including the risk of investment losses, liquidity risks, price volatility, and potential fraud.”
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