One of the main sections of the US Securities and Exchange Commission (SEC) has cryptocurrencies among the main agenda items for 2023. SEC Chairman Gary Gensler underlined in a statement that the institution will continue to protect investors in the USA. Additionally, the SEC has issued a warning that crypto assets are often unregistered securities traded on unregistered exchanges and that people should be wary of crypto in their private retirement accounts (IRA). Here are the details…
Cryptocurrencies are the focus of the SEC’s review section
The U.S. Securities and Exchange Commission’s Review Division named “crypto assets” and other emerging technologies a top priority for this year. The SEC has publicly shared the department’s “to-do list”. According to this section; It will examine brokerage firms and RIAs using emerging financial technologies or new applications, including technological and online solutions, to meet compliance and marketing demands and service investor accounts.
These reviews will focus on whether firms dealing with cryptoassets “meet the relevant standards of care when making referrals or investment advice”, as well as continually reviewing their own compliance, disclosure and risk management practices. The review section will also focus on ensuring that investment advisors comply with a new marketing rule the commission implemented last year that restricts the use of testimonials and referrals to encourage investments. As we reported as Kriptokoin.com, the SEC has initiated legal proceedings for some celebrities to support crypto assets.
Intended to comply with securities laws
Other agenda items that may apply to firms dealing with cryptoassets include reviewing the fiduciary performance of investment advisors and reviewing cybersecurity practices by brokerage firms and investment advisors. These reviews will include whether companies properly assess risk, how they hold custody of assets, and how advisors manage conflicts of interest. SEC Chairman Gary Gensler used the following statements in a statement:
In a time of growing markets, emerging technologies and new forms of risk, our Investigation Division continues to protect investors. In terms of execution, according to our priorities in 2023, the division will help ensure compliance with federal securities laws and rules.
Warning against crypto on retirement accounts issued
Apart from that, the SEC issued an investor warning Tuesday that crypto assets are often unregistered securities and that people should be wary of crypto in their private retirement accounts (IRA). The SEC said that self-directed IRAs sometimes offer crypto investments, and these “may be securities offered without SEC registration or a valid registration exemption.”
The institution, which is waging a legal battle against the crypto industry on many fronts, also warned investors about companies that trade cryptocurrencies. According to the investor alert, “Many of the trading platforms for these crypto assets refer to them as ‘exchanges’, which can give investors the impression that they are registered with the SEC.” Industry lobbyists and corporate executives have argued that the institution does not provide a realistic way to register for the stock market, arguing that many cryptocurrencies are not securities.
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