U.S. regulator urges registration of cryptocurrency exchanges
The U.S. Securities and Exchange Commission said on Wednesday that many online trading platforms for cryptocurrencies should be registered with the regulator and subject to additional rules, in a further sign regulators are cracking down on the digital currency sector, APA reports quoting Reuters.
In a statement, the SEC said these “potentially unlawful” platforms may be giving investors an unearned sense of safety by labelling themselves as “exchanges.” The regulator said these platforms need to register with the SEC as a regulated national securities exchange or an alternate trading system, or ATS.
The new statement marks the latest effort by the SEC to apply federal securities laws to the rapidly growing cryptocurrency sector. SEC Chief Jay Clayton has repeatedly expressed concern about cryptocurrencies and “initial coin offerings,” or ICOs, and has urged investors to exercise caution.
“The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not,” the agency said on Wednesday.
Bitcoin, the best known cryptocurrency, fell 11.9 percent to a 1-1/2 week low of $9,450 on Wednesday on the news, before rebounding slightly to $9,760, according to prices on the Luxembourg-based Bitstamp exchange.
Other digital currencies also fell sharply, with Ethereum and Ripple losing 9 percent and 8 percent, according to CoinMarketCap.
Clayton has said in the past that he generally considers ICOs to be securities offerings subject to certain regulatory requirements.
On Wednesday, the SEC went further by suggesting the majority of secondary market trading in those digital tokens was also subject to its jurisdiction.
The regulator said any platform providing trading of digital assets that behave like securities and which operate like exchanges must register with the SEC as a national securities exchange, or seek an exemption such as ATS registration.
While there are dozens of platforms offering trading in cryptocurrencies, Reuters could identify only one, Liquidity M – which is the broker dealer for Templum – that had registered with the SEC as an ATS, according to SEC data.
The regulator added that some cryptocurrency platforms may not behave like exchanges but offer related services - such as digital wallets - that trigger other registration requirements, such as becoming a clearing agent or broker dealer.
Dina Ellis Rochkind, a lawyer at Paul Hastings in Washington who has worked with many ICO providers, said the SEC notice marked another effort by the regulator to protect retail investors purchasing digital assets on platforms that do not afford the protections associated with SEC-registered exchanges.
“The SEC statement foreshadows that it will be cracking down on the numerous platforms that are operating illegally and could be subject to market manipulation. This is a positive step because it will shut out bad actors and further legitimize the industry as it matures,” she added.
The SEC statement follows media reports on Tuesday that the U.S. Treasury’s financial crime division told Congress in a letter last month that some ICOs may also be subject to the Treasury’s money transmission registration, anti-money-laundering and Bank Secrecy Act requirements.
Related news releases
- 20.06.2018SGC increases assets by 35% in 2017
- 20.06.2018Azerbaijan triples energy export this year
- 20.06.2018Azerbaijan’s positive balance from foreign trade turnover doubles
- 20.06.2018State Customs Committee increases budget transfers by 36%
- 20.06.2018Azerbaijan triples car import
- 20.06.2018“AzerTelecom” expanding its infrastructure in Baku and regions
- 20.06.2018Central Bank announces result of today’s auction
- 20.06.2018S&P Global: Insurance sector depends on banking sector in Azerbaijan
- 20.06.2018Azerbaijan to create temporary administration in insurance sector
- 14.06.2018Azerbaijan manufactures 130 cars this year
- 14.06.2018Azerbaijan sees 11% decline in capital outflow
- 14.06.2018Direct investments to Azerbaijan exceed $1B in Q1
- 14.06.2018Positive balance on money transfers to Azerbaijan reaches AZN 159M in Q1
- 14.06.2018Azerbaijan’s net financial assets increase by $1B in Q1
- 14.06.2018Azerbaijan sees $ 1.1B-surplus in balance of payment
- 14.06.2018Azerbaijan’s foreign trade turnover in five months makes up $3.3B
- 14.06.2018SOCAR’s funds in IBA reach AZN 1.5B
- 14.06.2018SOCAR gets 25% rise in money in banks
- 14.06.2018Compensations paid to SOCAR management last year exceed AZN 1.2M
- 14.06.2018Azerbaijan’s mobile operators earn AZN 350M in this year
- 14.06.2018Average exchange rate of manat for May announced
- 14.06.2018Azerbaijan sees 1.1% growth in economy
- 14.06.2018Central Bank of Azerbaijan lowers interest rates
- 14.06.2018Budget executed with a surplus of AZN 651mln during 5 months of 2018
- 14.06.2018Elman Rustamov: ‘To lower loan interest rates, risks have to be eliminated’
- 14.06.2018Elman Rustamov: Inflation rate projected to become single-digit by end of 2018
- 13.06.2018Fed raises rates amid stronger inflation, drops crisis-era guidance
- 13.06.2018Azerbaijan Railways to increase authorized capital by AZN 100M
- 13.06.2018SCC transfers AZN 1.3B to state budget in five months
- 13.06.2018AZN 5.2B invested in Azerbaijan’s fixed capital in five months of 2018
- 13.06.2018Seminar on Azerbaijan’s customs – challenges for today and tomorrow kicks off in Baku
- 13.06.2018Ministry of Taxes transfers AZN 2.4B to state budget
- 13.06.2018Azerbaijani population spend AZN 7B on food this year
- 12.06.2018Reasons for revision of state budget announced
- 12.06.2018SOFAZ’s budget transfers increased by 19%
- 12.06.2018Azerbaijan increases forecast on SCC’s budget transfers by 30%
- 12.06.2018Azerbaijan’s external public debt for four months announced
- 12.06.2018Forecast on budget transfers through Ministry of Taxes increased by 6%
- 12.06.2018Base oil price in 2018 state budget to be increased
- 12.06.2018Revenues and expenditures of 2018 state budget to be increased
- 09.03.2018Official Exchange Rates
- 09.03.2018Azerbaijan’s Central Bank to hold deposit auction
- 09.03.2018Azerbaijan imports about 2,100 cars since early 2018
- 07.03.2018USD rate for March 9 announced
- 07.03.2018USD operations decline 1.9-fold in Azerbaijan
- 07.03.2018Deposits in national currency increase in Azerbaijan