- What – The SEC announced it would review cryptocurrency brokers and firms in 2023.
- Why – To ensure compliance with risk management practices and standards of care.
- What Next – The Division will work towards implementing the 2023 priorities and ensuring adherence to federal securities laws and regulations.
The U.S. securities regulator has designated the cryptocurrency sector and emerging financial technologies a priority this year. The SEC is reflecting its commitment to adapting to the evolving financial landscape.
The Securities and Exchange Commission (SEC) has announced that it has selected critical areas of focus to mitigate potential risks to investors and preserve the integrity of the American capital markets. Through careful consideration, the SEC intends to safeguard investors and ensure the financial system’s stability.
The SEC’s Division of Examinations selects and publishes priorities based on its market analysis to identify potential risks. This division helps protect investors and maintain market integrity.
The Division of Examinations plans to examine broker-dealers and investment advisors using emerging financial technologies, including cryptocurrency, to assess their adherence to standards of care for investors and proper risk management procedures. This will help ensure the protection of investors and maintain the integrity of the financial system.
Richard R. Best, Director of the Division of Examinations, said that the priorities reflect the changing market landscape and its risks. The SEC aims to stay ahead of trends to identify potential dangers to investors and markets better.
The SEC’s priorities also include a focus on Environmental, Social, and Governance (ESG) investing and the cybersecurity of securities professionals. This shows the SEC’s commitment to ensuring investors’ protection and the financial system’s stability in all areas, including ESG and cybersecurity.
Is SEC Being Pressured To Oversee The Cryptocurrency Frauds?
Last month, Massachusetts Senator Elizabeth Warren called for the SEC to take more decisive action against crypto fraud. This highlights the need for the SEC to be vigilant in its efforts to protect investors and maintain the financial system’s integrity in the rapidly evolving world of emerging financial technologies, including cryptocurrency.
While some advocate for the Commodity Futures Trading Commission (CFTC) to take the lead in regulating cryptocurrency in the U.S., Senator Warren believes that SEC rules are the appropriate approach. This suggests a belief in the SEC’s ability to regulate the crypto industry and protect investors effectively.
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