Regulations

SEC’s Office of Compliance Inspections and Examinations Highlights Cryptocurrency as Focus Point in 2019

SEC’s Office of Compliance Inspections and Examinations Highlights Cryptocurrency as Focus Point in 2019

Regulations pertaining to cryptocurrencies have been notoriously slow during 2018. Although some countries have attempted to fast-track cryptocurrency-friendly regulations in efforts to stimulate innovation and adoption, many nations remain reluctant to do so.

Cryptocurrency one of six focus points

However, it would appear that the US might be moving closer towards cryptocurrency regulations – at least slowly. In fact, the Office of Compliance Inspections and Examinations (OCIE) of the US’ Securities and Exchange Commission (SEC) is now labeling cryptocurrencies one of its focus points during 2019.

This news comes in a recent OCIE report, entitled ”2019 Examination Priorities.” Put simply, this document calls for increased focus and attention towards the cryptocurrency industry and market. The cryptocurrency industry is one of the OCIE’s six focus points for 2019.

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”Given the significant growth and risks presented in this market, OCIE will continue to monitor the offer and sale, trading, and management of digital assets, and where the products are securities, examine for regulatory compliance,” the report reads.

It goes on to note that ”[i]n particular, through high-level inquiries, 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.”

As such, the OCIE is looking to more closely inspect the activities of companies associated with the digital asset market. Such scrutiny will likely create a deeper understanding of the cryptocurrency sector for the OCIE, and in extension, the SEC.

Examination could be the first step towards regulation

If so, such examination could create the foundation for appropriately designed and crafted cryptocurrency regulations. Nevertheless, it is worth noting that this focus will likely just be the first of many steps towards actual regulations.

The OCIE’s director, Pete Driscoll, noted that ”OCIE is steadfast in its commitment to protect investors, ensure market integrity and support responsible capital formation through risk-focused strategies that improve compliance, prevent fraud, monitor risk, and inform policy.”

However, this is not the first time that the OCIE has expressed an interest in more closely examining the cryptocurrency industry. In fact, the same item was mentioned on OCIE’s agenda for 2018. Nevertheless, the OCIE’s extension of this goal during 2019 suggests that the agency is serious about understanding the cryptocurrency industry.

Nevertheless, it remains to be seen what this will all amount to. Increased cryptocurrency regulation is generally considered to be a double-edged sword of sorts – as regulation is on the one hand necessary for mainstream adoption, but it also risks stifling innovation.

Nevertheless, it remains to be seen what this will all amount to. Increased cryptocurrency regulation is generally considered to be a double-edged sword of sorts – as regulation is on the one hand necessary for mainstream adoption, but it also risks stifling innovation.

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