SEC Expects Exchanges to Legally Register – Bittrex Responds
The SEC has released a statement proclaiming that crypto coins should be labelled as securities and crypto exchanges, therefore, need to register with the SEC.
A security, as commonly defined, is any investment on which the investor hopes to profit via others’ efforts. Essentially, a security is a tradable financial asset. There have been numerous arguments about whether or not crypto assets fall into the security definition, but now it seems the SEC is finally trying to draw the line.
This is all part of the SEC’s attempts to offer further regulation to the crypto market. The SEC stated that the “federal regulatory framework governing registered national securities exchanges and exempt markets is designed to protect investors and prevent against fraudulent and manipulative trading practices” – meaning that the SEC wants to keep investors safe.
The SEC continued on to say:
“The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not. Many platforms refer to themselves as ‘exchanges,’ which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange.”
What do the exchanges have to say on the matter?
Bittrex seems to be the first crypto exchange to come forward with a response. The exchange released a statement shortly after the SEC statement:
“As a U.S.-based digital currency exchange, Bittrex is committed to incubating new blockchain technology projects and offering innovative, compliant digital tokens to our customers. Bittrex uses a robust digital token review process to ensure the tokens listed on the exchange are compliant with U.S. law and are not considered securities. Bittrex is committed to helping advance the United States’ global leadership in this emerging industry, and we look forward to continuing our proactive dialogue with the SEC and other regulators on how to build a secure, fully-regulated environment for blockchain that encourages innovation and economic growth.”
So, evidently, Bittrex is combatting the argument by saying that cryptocurrencies are not securities.
The question then is – who is right? Are cryptos securities or are they just assets? Comment below what you think.
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