SEC Seeking Stock Market-Type Regulation Around Crypto


Well, is this GOOD news or BAD news? Oh yeah, I’m talking about the hearings, committee meetings, forums, etc. (yawn) that are springing up all over with SEC and CFTC officials trying to figure out how to regulate cryptocurrencies. While not wanting to hinder innovation, but rather protect the poor naive investing public, officials are dragging their feet to come up with how to get a handle on the new revolution. Certainly new rules and regulations are in order and welcome since they will bring credibility to “token trading”. BUT, trying to solve the same problems (fraud, manipulation, theft, cybersecurity, etc) that regulators still have not fixed in existing markets seems to be a waste of time (will those jet engines fit on that old reliable propeller plane?). Here’s an idea; why not start from scratch? How about the “Crypto Token Commission” (CTC) to initiate registered exchanges and policing? Staff the “CTC” with people who have led the innovation? Don’t try to teach old regulators new tricks, just bring in fresh talent. Or, just call Gibraltar, Switzerland, Canada or even………gasp…..France. But better hurry, the train has left the station.
(Bill Taylor/Managing Editor)

“The cryptocurrency trading marketplace could be improved by applying some of the principles from the stock market such as best execution and surveillance, a senior U.S. Securities and Exchange Commission official said on Thursday.

While the cryptocurrency market is still evolving, it resembles a sort of “Wild West,” said Brett Redfearn, who heads SEC’s trading and markets division, and the regulator has a number of concerns it would like to see addressed.

Key among the SEC’s concerns are fraud, market manipulation, theft, cybersecurity, terrorist financing and money laundering, he said at a financial technology conference in New York held by the Depository Trust & Clearing Corporation.

SEC Chairman Jay Clayton has said he generally considers initial coin offerings, or ICOs, to be securities offerings subject to certain regulatory requirements.

There are some 1,500 cryptocurrencies trading currently, and the SEC has repeatedly warned investors to exercise caution when considering getting involved in new ICOs, especially as many of the online crypto-trading platforms resemble highly regulated stock exchanges.

“There are no registered exchanges, there are no registered ATSs (Alternative Trading Venues) trading any of these products,” said Redfearn, a former JPMorgan Chase executive. “That is a very big concern for us,” he said, stressing that while the SEC does not want to stifle innovation, it has a duty to protect investors…”

Source: Reuters