Digital Securities Brokers Might Not Be Topic to Enforcement for five Years, Says US Regulator
The US Securities and Exchange Commission has issued a statement requesting a public statement regarding the safekeeping of digital asset securities that have been processed by broker-dealers for special purposes. The SEC’s statement follows the recent crackdown on Ripple Labs and the subsequent delisting of XRP on various platforms.
Since the SEC announced that it was suing Ripple and the top two executives, the crypto asset XRP has depreciated significantly. In addition, three cryptocurrency exchanges such as OSL, Crosstower and Beaxy have moved XRP off the platforms since the SEC announcement. Additionally, following the SEC lawsuit, the Bitwise mutual fund decided to sell its XRP holdings as the fund’s portfolio held nearly 4% of XRP.
On December 23, the SEC issued a statement regarding the safekeeping of securities of digital assets that were being cleared by broker-dealers. The government agency issued the statement to “encourage innovation in the application of the Securities Exchange Act Rule 15c3-3 to digital asset securities.”
Essentially for a period of five years, some brokers who have dealt with digital securities and customers provide certain claims may not see enforcement against them.
“For a period of five years, a broker-dealer operating in the circumstances set out in the statement will not be subject to any enforcement action by the Commission on the basis that the broker-dealer has obtained and maintained physical possession or control of himself Customers fully paid and over-margin digital asset securities within the meaning of paragraph (b) (1) of Rule 15c3-3, ”the SEC said.
The US regulator adds:
Such circumstances include, but are not limited to, the broker-dealer limiting its business to digital asset securities, establishing and implementing policies and procedures appropriate to mitigate the risks associated with conducting a digital asset securities business, and Customers making certain disclosures about the risks of transactions in securities of digital assets.
The US Treasury Secretary also said the government agency is “seeking comment” to gain insight into “evolving standards and best practices” regarding digital asset custody.
The SEC has been taking action against the crypto industry for some time and has commissioned the blockchain company Block.one to carry out an unregistered first coin offer for digital tokens (ICO). Block.one has settled the charges by paying a civil fine of $ 24 million, the US regulator detailed last year.
In addition to the exchanges and bit-wise XRP dropping, The Block’s post Frank Chaparro detailed on Wednesday, Mike Novogratz ‘Galaxy Digital and Jump Trading company have reportedly decided to stop trading XRP since the SEC charges fees. However, according to the SEC’s statement, other platforms may decide not to drop XRP in the future.
“The Commission welcomes the involvement of interested parties on these issues,” concluded the US regulator.
What do you think of the SEC’s recent statement to brokers and traders dealing with digital currency securities? Let us know what you think in the comments section below.
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