[ad_1]
In a report from the United States Securities and Exchange Commission (SEC) Office of Inspections and Compliance Assessments (OCIE), the cryptocurrency space was named as a priority. The body states that the industry can present high levels of risk to retail investors.
OCIE oversees thousands of investment advisers, mutual funds and ETFs and broker-dealers, along with many agents, consultants and various exchanges. The mission declared by the body is to help the SEC in protecting investors, maintaining fairness and efficiency in the markets and loosening investments through inspections and examinations by of the various market participants.
The cryptocurrency space grows in tandem with potential risks
In the document that reported the priorities of the OCIE of the SEC for 2019, the inspection division of the financial regulator recognized the parabolic growth of the cryptocurrency industry. According to the body, such rapid growth presents a greater risk for retail investors.
The OCIE document statistics indicate that the number of participants in the digital currency market has exploded in recent years and continues to follow this growth trend. He explicitly mentioned the following market operators: broker-dealers, trading platforms and investment advisors.
The document states that OCIE will continue to keep an eye on space. Particular attention will be paid to companies or individuals currently involved in the sale, trade or management of digital currencies, along with those seeking to offer such services in the future.
The OCIE continues by stating that it will carry out inspections on market participants. These exams will focus on how people or companies have managed digital asset portfolios, their business practices, their regulatory compliance, and how well they insure customer funds, among other things.
Other areas in addition to the encryption mentioned by the OCIE as priorities for 2019 include: important issues related to retail investors, compliance and risk in those registered with regulators responsible for the market infrastructure, some FINRA and MSRB programs. , computer security and anti-money laundering.
Regulatory surveillance aims to protect cryptocurrency investors
Since the cryptocurrency space has evolved largely outside the investors' objectives, it has become full of various scams. Common among these is the offer of initial fraudulent currency. During the bull's run in 2017, almost every company that launches an ICO would benefit from huge amounts of digital resources for little more than a white paper. This accumulation of unregulated capital did not go unnoticed by the SEC.
The regulatory body has spent much of the last 18 months trying to control the space and bring the most obvious scammers to justice. A famous example was an ICO promoted by Floyd Mayweather and DJ Kalhed. There have been many other similar cases, however.
More recently, the SEC has judged that many cryptocurrencies would fall under its direct jurisdiction as titles. Bitcoin and Ether have remained exempt from this ruling for now. This classification gave the regulatory body much more freedom to prosecute scams and those who promote them in space. However, the question of which assets are securities and which are not yet turbid – to the great displeasure of many professionals in the sector.
Related reading: The SEC orders Airfox and Paragon to return millions to investors for violations of the ICO registration
Shutterstock foreground image.
