U.S. Regulator Recommends Registration Of Cryptocurrency Exchanges

According to a public statement by the regulatory body on Wednesday, March 7, The US Securities and Exchange Commission (SEC) is now calling on all platforms trading digital assets which meet the definition of a security must register with the agency as an exchange.

This is because cryptocurrency exchanges will be ruled by the same regulations as traditional exchanges. And because of this, they’ll have to register with the Sec “as a national securities exchange or be exempt from registration.”

The SEC made a clear warning statement that many online trading platforms calling themselves exchanges are currently uncalled for, though they may prove to sectors and business that they comply with the regulatory standards.

“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 further went on adding that some of these trading platforms establish their own rules and standards when picking digital assets that are not approved or endorsed by the SEC.

The firm went on stressing that entities looking or currently operating as an alternative system (ATS) are also subject to regulatory requirements. These types of exchanges should register with the SEC as a broker and become a member of a self-regulatory organization (SRO).

“Registration as a broker-deal 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,” noted the SEC.

The SEC is undertaking these regulatory measures “to protect investors and prevent against fraudulent and manipulative trading practices.”

The SEC is also open to assisting trading platforms implementing new technologies to comply with federal securities laws.