The US Securities and Exchange Commission is constantly tightening measures over cryptocurrencies. The latest update on cryptocurrency regulations in the USA refers to exchanges that have securities tokens in their listings.
The US Securities and Exchange Commission is constantly tightening measures over cryptocurrencies. The latest update on cryptocurrency regulations in the USA refers to exchanges that have securities tokens in their listings. Moreover, those exchanges run the risk of falling under federal law.
The SEC statement was released on March 7 and it warns exchanges supporting tokens that are deemed securities that they are potentially running platforms that are considered illegal. An excerpt from the statement says:
“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 full text is available here.
Developers are trying to bypass the law by labeling their tokens utilities but according to Jay Clayton (SEC Chairman), the better part of ICOs observed by the Commission offer securities, not utilities. It turns out that the “security” label goes for exchanges listing such tokens as well not only ICOs . Whether this is right or wrong we cannot tell. But it is clear that the Securities and Exchange Commission is restlessly trying to captivate every single party involved in either crypto trade or initial coin offerings.
The statement reveals that exchanges must register tokens appropriately or register as a national securities exchange. “In advancing the SEC’s mission to protect investors, the SEC staff will continue to focus on platforms that offer trading of digital assets and their compliance with the federal securities laws,” as written in the statement.
Last week Circle acquired Poloniex, as we reported earlier. It is interesting to note that during the press conference after the acquisition Circle revealed that SEC representatives have gotten in touch with them, ensuring Circle won’t be held responsible for Poloniex activities prior the acquisition. However, there is a catch, Circle has to register Poloniex in accordance with SEC laws.
As of now, the Commission has reached as much as 80 ICO issuers, demanding documents regarding their tokens. SEC is wasting no time since it is pursuing ICO issuers at such a fast pace. This news comes just a few days later after the Financial Crimes Enforcement Network stated exchanges should register as money transmitters and pay their taxes, respectively.