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SEC Outlines Guidelines On Issuance And Trading Of Digital ...

SEC Outlines Guidelines On Issuance And Trading Of Digital Asset Securities

The United States Securities and Exchange Commission [SEC] is back in the limelight with yet another bold statement. The regulatory body recently published an article that outlines that the rules and regulations have to be followed by everyone whether they are involved in the cryptocurrency space or not.

The announcement claimed that the Division of Corporation Finance, Investment Management, and Trading and Markets under the commission encourages the technological advancement and its benefits to the investment markets. Nonetheless, everyone has to “adhere” to their “well-established and well-functioning federal securities law framework”. They added that this implies irrespective of whether the securities are issued in certificated form or with blockchain technology.

They further outlined the issues that were found in their recent crackdown, i.e., AirFox, Paragon, Crypto Asset Management, EtherDelta’s Founder, and TokenLot, in three pointer. The first being sales and offering of security tokens including the issuance of securities during Initial Coin Offering. The second is the investment firms investing in securities and the ones advising others to invest in securities and the third is secondary market trading of the digital securities. The commission also elaborated on the three issues that were outlined.

Based on the report, AirFox and Pargon were scrutinized for offering tokens which are classified as securities without registering with the commission. Whereas Crypto Asset Management was held accountable for not registering with the commission as it was formed to be a hedge fund for investing in cryptocurrencies.

Additionally, the manager of the firm was playing the role of an investment adviser and was held accountable for misleading the investors.

EtherDelta, a decentralized exchange for the Ethereum based tokens, was also in the spotlight because of the SEC. However, it was not the exchange that caught the attention of the commission, it was the Founder. This was because the Founder had failed to register the exchange with the SEC despite having all the characteristics of one. And TokenLot was held responsible for not registering itself as a broker dealer.

Veneratio1980, a Redditor said:

“One more reason to be long for the long term. SEC slowly but surely providing guidance. The more clarity the SEC provides, the closer Institutions are to investing”

OsrsNeedsF2P, another Redditor said:

“Just read it. A key takeaway is if you develop for a decentralized exchange, you must register as an operator of an exchange. Time to finally start seeing true DEX’s like Bisq shine. No website, all P2P, anonymous developers. Let’s go”


Bitcoin participant since 2014 - Online tech journalist

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