The Securities and Exchange Commission seems to be hell bent on having total regulation on cryptocurrency. This has adversely affected the price of Bitcoin this week as it fell below the $10,000 mark on Wednesday. The SEC has set out its requirements that will see digital assets register with the agency. This is especially so for assets seen as securities.
Why Target Bitcoin?
Considering that bitcoin happens to be the largest crypto based on market capitalization, it has borne the brunt as it dropped by almost 10 percent on Coinbase. This is basically blamed on the fear that the SEC aims to tighten regulations, which will seem trading go through restrictions.
In a statement, the SEC said:
If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.
The Term “Exchanges” Causing a Headache
The main concern that seem to be bothering the SEC is the fact that most online trading systems are giving the impression to investors that they are SEC-regulated and registered, when they are actually not. According to the SEC, most of these platforms call themselves “exchanges”, something which may be misinterpreted by investors.
The regulatory agency’s statement comes in a week that saw them subpoenas issued, which are meant to help them establish how these online trading platforms conduct their business and thus get a chance to better regulate and control them.
Securities or Non-securities? Setting the Record Straight
Notably, the SEC is now keen more than ever the draw the line that will help distinguish between securities and non-securities. However, it is yet to go as far as naming names according to a partner at Blockchain Capital, Spencer Bogart.
Mr. Bogard reckons that he hopes the crackdown will lay more emphasis on the so-called “altcoins” instead of Bitcoin. He says that Bitcoin should be the last to be thought of as security of all crypto assets.
There has been an ongoing debate as to whether securities laws should govern digital assets and this has seen most trading firms rely on attorneys and self-disclosure in their bid to set themselves apart from the common scams sprouting up online on an almost daily basis.