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The regulatory guard dog has recently published a report that talks about the inspection and compliance control of the emerging cryptocurrency market.
Monitoring and scrutinizing the cryptocurrency market will be a top priority of the US Securities and Exchange Commission (SEC) in 2019. The SEC recently published a report called Office of Compliance Inspections and Examinations (OCIE), for 2019.
The OCIE report mentions six "themes for OCIE's 2019 exam priorities" that include digital assets in the form of digital tokens, cryptocurrencies, and currencies. In addition, OCIE will also monitor encryption activities on the market, including "offering and selling, negotiating and managing digital assets".
In addition to monitoring the emerging market, OCIE will also push compliance for existing security laws. Therefore, for any digital resource classified as security, the compliance will ensure the application of appropriate regulatory measures. The OCIE report notes:
OCIE will take measures to identify market participants who offer, sell, exchange and manage these products or take into consideration or actively seek to offer these products and then evaluate the scope of their activities. For companies actively operating in the digital goods market, OCIE will conduct examinations focused, among others, on the management of the portfolio of digital assets, negotiation, security of funds and customer activities, determination of client portfolios, compliance and internal controls.
Main purpose of protecting retail investors
The report notes that the basic objective of OCIE will be to protect investors' interest in this nascent cryptocurrency market. In addition, OCIE will also clarify the risks of investing in cryptographic assets to investors. The report notes that the priority areas for scrutiny are selected on policies, evaluation or risk and various sectors.
"Areas of interest will include, among other things, whether financial professionals will maintain adequate controls and safeguards to protect these assets from theft or misappropriation, and whether financial professionals will provide investors with information on the risks associated with such investments, including the risk of investment losses, liquidity risks, price volatility and potential fraud. "
Currently, there is a growing feeling that SEC actions have a negative impact on the growth of the cryptic sector. The question of the approval of a Bitcoin ETF has remained a long time. In November 2018, the SEC president expressed reluctance to approve the Bitcoin ETF until the exchanges offer better surveillance tools.
Later, in December 2018, the chairman also stated that ICOs are good fundraising schemes provided that the "securities law" is followed.
"I believe ICOs can be effective ways for entrepreneurs and others to get capital." The new technological nature of an ICO does not change the fundamental point that when security is offered, our securities laws must be followed, "he said.
Cryptic investors weighed heavily on the arrival of Bitcoin's ETF to bring back the bullish momentum in the encrypted market. However, the SEC has always turned away. Last month, the SEC commissioner said that encrypted investors should not keep much hope from the agency. The approval of Bitcoin ETF is a critical problem and can take from a few days to many years.
Despite the long story, the asset management company and the indexed fund manager, Bitwise, has recently applied for the Bitcoin ETF with the SEC. Bitwise claims to have taken into account all regulatory requirements before its last application.
