According to the Office of Compliance Inspections and Examinations cryptocurrencies will be one of the top priorities of the U.S. Securities and Exchange Commission in 2019.
According to the OCIE report, the SEC will focus particularly on protecting retail investors and vows to doing the utmost to protect investorsin general.
The SEC’s OCIE will monitor the market activities that include the offer and sale, trading, and management of digital assets. If the digital asset is classified as a security, the goal will be to ensure regulatory compliance.
The report further states that in 2019, the OCIE will prioritize certain practices, products, and services that it believes present potentially heightened risk to investors or the integrity of the U.S. capital markets.
‘OCIE will take steps to identify market participants offering, selling, trading, and managing these products or considering or actively seeking to offer these products and then assess the extent of their activities. For firms actively engaged in the digital asset market, OCIE will conduct examinations focused on, among other things, portfolio management of digital assets, trading, safety of client funds and assets, pricing of client portfolios, compliance, and internal controls.’
Cryptocurrencies as a top examination priority was already on the agenda of the OCIE in 2018.
‘Areas of focus will include, among other things, whether financial professionals maintain adequate controls and safeguards to protect these assets from theft or misappropriation, and whether financial professionals are providing investors with disclosure about the risks associated with these investments, including the risk of investment losses, liquidity risks, price volatility, and potential fraud.’
The SEC has been accused of having a negative impact on the cryptocurrency industry. Mainly Republican lawmakers pointed fingers at the SEC, claiming that the massive crackdown on ICOs was detrimental to innovation.
SEC Chair Jay Clayton’s Mass Crackdown On Crypto Industry Roils GOP Lawmakers https://t.co/A0GrjJLDFS
— #FinancialFreedom (@KPesaBit) December 29, 2018