The U.S security and Exchange Commission (SEC) has revealed it has set its crypto compliance strategy right for the New Year 2020.
Because of several oversight requirements posed by cryptocurrency, Office of Compliance Inspections and Examinations (OCIE) that regulates activities in the crypto industry published its list of 2020 examination priorities, highlighting digital assets and service providers as areas of concern.
The 2020 crypto compliance strategy draws a similar comparison to the previous annual priority list; however, Tuesday’s publication provided a glimpse at how the office’s approach to crypto has evolved since 2018.
The 2020 release includes new financial technologies, including digital assets among major concerns in the coming fiscal year, unlike last year’s outline that briefly mentioned initial coin offerings and the risks digital assets might pose to retail investors.
The 2020 statement explained that new technological developments in capital formation and investment advice warrant ongoing attention and review.
After the document talked about many issues, it harped more on crypto compliance. It talked broadly about the risks posed to retail investors who simply jump into the emerging crypto market without understanding how crypto assets differ from traditional investments.
The document said OCIE would continue to identify and examine SEC-registered market participants engaged in the crypto space with examination cutting across investment sustainability, portfolio management and trading practices, safety of client funds and assets, pricing and valuation effectiveness of compliance programs and controls, and supervision of employee outside business activities.
SEC’s hint on kind approach
The SEC has broadly stepped up its engagement with cryptocurrencies, particularly initial coin offerings (ICOs); however, SEC’s commissioner Hester Peirce expressed interest in promoting a more flexible regulatory approach to crypto offerings.
She said this in an interview and mentioned that SEC would identify offerings that don’t fall under the SEC’s purview.
The biggest thing the crypto community needs is a way to get from security offering to a utility token offering that is not covered by securities laws or is not covered by the full panoply of the securities laws she said in her words.