US SEC Emphasizes Crypto Compliance in 2020 As Priority Subject To Kinder Gentler Approach
The United States Securities Exchange Commission has continued its relentless effort in scrutinizing crypto as its compliance office adds fintech and digital assets to its annual priorities list.
In line with an announcement of January 7, from the department of office of Compliance Inspections and Examinations (OCIE), the agency has adopted new financial technologies including digital assets among major concerns in the coming fiscal year.
According to them,the new technological developments in capital formation and investment advice “warrant ongoing attention and review.”
OCIE made a similar disclosure at the beginning of 2019. At that time, however, the office said that:
“OCIE will continue to monitor the offer and sale, trading, and management of digital assets, and where the products are securities, examine for regulatory compliance.”
As the office charged with the responsibility for investigating possibly illicit usage of securities, it is rational and reasonable that OCIE would be on the alert for compliance.
There is an obvious discrepancy between the OCIE’s 2020 priorities for crypto differ and those of 2019 in that they seem more broadly interested in the positive potential of financial technologies.
The office wrote that “OCIE also will continue to identify and examine SEC-registered firms engaged in the digital asset space”
It is obvious that the Securities and Exchange Commission has broadly improved on its engagement with cryptocurrencies, particularly initial coin offerings (ICOs).
Famous examples of SEC’s actions against such ICOs include messenging apps Kik with its KIN token and Telegram with its GRAM offering, as well as its $24 million settlement with block.one over the EOS tokens native to its dApp platform.
Reportedly last month, SEC Commissioner Hester Peirce disclosed interest in promoting a more flexible regulatory approach to crypto offerings, including identifying offerings that don’t fall under the United States Securities Exchange Commission purview. She said:
“The biggest thing the crypto community needs is a way to get from a securities 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.”
Just recently, crypto exchange Kraken reported a major rise in requests from law enforcement to investigate transactions on the exchange. Similarly, the Internal Revenue Service — the country’s tax authority — has been increasingly assertive in tracking cryptocurrency for taxation purposes.