The US Securities and Exchange Commission has classified cryptocurrencies are one of the top examination priorities of this year.
According to the SEC’s Inspections and Examinations arm, this examination on the crypto market participants will be done by keeping in mind the safety and security of the investors in the nascent asset class.
The Inspections and Examinations arm of SEC will monitor market activities like the trading, ‘offer and sale, and management of crypto assets. In cases where the crypto assets are classified and registered as a form of security, the Inspections and Examinations arm of SEC will check whether it in compliances of the regulatory. Every market participants related to the crypto industry would have to face the scrutiny and examination of SEC.
The investigation arm of SEC is called OCIE, which work will be to identify market participants who are involved in different activities like, selling, trading, or managing digital/crypto products or who are considering or actively looking for a way to offer such products, and then evaluate their activities.
If the firms actively involved in the digital asset market, OCIE will undertake examinations by focusing on other things such as trading and of digital assets, safety d traders and investors, portfolio management of these assets, pricing of portfolios, and compliance.
Instead, last year also SEC had made it a point to keep evaluation and examination of digital assets as its priority. But at that time, the focus was more on assuring the safety and security of crypto assets educating traders and investors about the risk involved in investing at such assets.
The SEC will also check whether the financial professionals are maintaining adequate controls and safeguards to secure these assets from theft or any wrongdoing. It will also see if financial professionals are informing investors about the risks connected to these types of investments, be it liquidity risks, price fluctuations, and or risk of fraud.
This announcement of examination is made at a time when there is an increasing doubt or perspective in the market that the SEC and its actions are having a negative impact on the crypto market.
Last month, the chairman of the SEC, Jay Clayton was questioned by the Republican lawmakers for adopting a harsh approach while enforcing regulations.