SEC Examination Office Gets Specific About Crypto Priorities in 2020
The Securities and Exchange Commission (SEC) will continue its evaluation of cryptocurrency-based securities for U.S. retail investors.
The SEC’s Office of Compliance Inspections and Examinations (OCIE) published its list of 2020 examination priorities, highlighting digital assets and service providers as areas of concern. While OCIE has listed these items in previous annual priority lists, Tuesday’s publication provided a glimpse at how the office’s approach to crypto has evolved since 2018.
Whereas previous priority lists only briefly mentioned initial coin offerings and the risks digital assets might pose to retail investors, this year OCIE wants to address investment suitability, trading practices, fund safety, pricing and the effectiveness of compliance programs. The document also mentions staffers of crypto exchanges and funds and the “supervision” of their “outside business activities.”
“The digital assets market has grown rapidly and presents various risks, including for retail investors who may not adequately understand the differences between these assets and more traditional products,” OCIE wrote.
OCIE will also examine transfer agents – entities which act as intermediaries in securities transactions – that are “developing blockchain technology” or are providing services to digital asset issuers, the document said.
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