The SEC has just unveiled new examination priorities for 2020. Here’s what’s expected for cryptocurrencies in 2020.
It’s another year of cryptocurrency-related drama at the SEC. The regulatory agency has just announced its 2020 examination priorities. A focus on ‘digital assets’ is listed as a priority for the SEC.
The criteria for regulatory examination on cryptocurrencies comes down to a few key areas. Although the language is hard to understand for those not in-the-know, six key areas were outlined by Katherine Wu (@katherinekwu). Let’s break them down.
- Investment suitability: The SEC will assess risk and whether there is an overly high probability of losses that would unfairly hurt investors. This will work to further kick out scamsIt's no secret that the realm of Bitcoin and cryptocurrency are still in a bit of a "Wild West" phase.... More from the industry.
- Portfolio management and trading practices: Sources of data will be vetted to ensure that cryptocurrency portfolio management is in line with other market sectors.
- Safety of funds: Given that custodial services and exchanges are increasingly holding cryptocurrency funds, the SEC is taking a focus on ensuring these funds are safe and insured.
- Pricing and valuation: Insider trading, pump-and-dump schemes, and assessing market risk all remain high on the agenda for the SEC. This is part of the reason why a Bitcoin BUY NOW ETF has been delayed thus far: the market still has to meet these standards.
- Compliance programs and controls: As expected, compliance programs will take precedence this year as the SEC is expected to green-light more blockchain projects.
- Supervision of employees outside business activities: All employees of broker-dealers will legally need to report outside business activities. This will expectedly be applied to the cryptocurrency industry as well.
Although the 2020 examination priorities did not put forward many regulatory specifics, it seems clear that digital assets will continue to be a hot topic for the SEC this year. Hopefully, there will be some clarification on the endless ‘securities or utility tokens’ question, which has been plaguing most cryptocurrency projects for some time now.
Legal clarity is ultimately the necessary step needed before the blockchain space can mature and be accepted in the economy at large. 2020 is looking like it’ll bring the industry closer to this goal.
Do you want to Be In Crypto?Join our Telegram Trading Group for FREE Trading Signals,a FREE Trading Course for Beginners and Advanced Tradersand a lot of fun!
Images courtesy of Shutterstock, TradingView and Twitter.
Disclaimer. Read MoreRead Less
As a leading organization in blockchain and fintech news, BeInCrypto always makes every effort to adhere to a strict set of editorial policies and practice the highest level of journalistic standards. That being said, we always encourage and urge readers to conduct their own research in relation to any claims made in this article.
This article is intended as news or presented for informational purposes only. The topic of the article and information provided could potentially impact the value of a digital asset or cryptocurrency but is never intended to do so. Likewise, the content of the article and information provided within is not intended to, and does not, present sufficient information for the purposes of making a financial decision or investment. This article is explicitly not intended to be financial advice, is not financial advice, and should not be construed as financial advice. The content and information provided in this article were not prepared by a certified financial professional. All readers should always conduct their own due diligence with a certified financial professional before making any investment decisions.
The author of this article may, at the time of its writing, hold any amount of Bitcoin, cryptocurrency, other digital currency, or financial instruments — including but not limited to any that appear in the contents of this article.