US SEC Requires Cryptocurrency Exchange Registration


In the latest news, the US SEC requires cryptocurrency exchange registration. The new rule will apply to the trading platforms which meet the definition of a security. They will need to register with the agency as an exchange.

8 March, AtoZForex The US Securities and Exchange Commission (SEC) has announced that from now on, it requires cryptocurrency trading platforms which meet the definition of a security to register with the agency as an exchange.

US SEC Requires Cryptocurrency Exchange Registration

The US financial markets regulator has issued a statement that clarifies that cryptocurrency exchanges will be regulated by the same rules as traditional exchanges. Due to this reason, the exchanges must register with SEC “as a national securities exchange or be exempt from registration”.

In the official statement by SEC, the regulator has warned that a number of online trading platforms that call themselves exchanges are currently unregulated. However, they can provide an impression that they are compliant with the regulatory framework in place. The SEC has stated:

“The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not.”

The regulatory announcement also mentioned that some of these illegal trading platforms set up their own rules and standards in regards to the digital assets. The regulator stresses that they are not approved by the SEC.

ATS Registration with SEC

Furthermore, the SEC has added that these entities are aiming to operate as an alternative trading system (ATS). They are also subject to regulatory requirements. As a matter of fact, this kind of exchanges should register with the SEC as a broker-dealer. They are also required to become a member of a self-regulatory organization (SRO). The SEC statement reads:

“Registration as a broker-dealer 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.”

As per the regulatory statement, the SEC is taking steps “to protect investors and prevent against fraudulent and manipulative trading practices.”

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