/biz/ - Business & Finance

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Bottoms are events not a process

> WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission said on Wednesday that many online trading platforms for cryptocurrencies should be registered with the regulator and subject to additional rules, in a further sign regulators are cracking down on the digital currency sector.

> In a statement, the SEC said these "potentially unlawful" platforms may be giving investors an unearned sense of safety by labeling themselves as 'exchanges'. The regulator said many of these platforms likely need to register with the SEC as a regulated national securities exchange or an alternate trading system (ATS).

> The new statement marks the latest effort by the SEC to apply existing federal securities laws to the rapidly growing cryptocurrency sector. SEC Chief Jay Clayton has repeatedly expressed concern about cryptocurrencies and "initial coin offerings," or ICOs, and has urged investors to exercise caution.

> "The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not," the agency said in the statement.

> Clayton has said in the past that he generally considers ICOs to be securities offerings subject to certain regulatory requirements.

> On Wednesday, the SEC went further by suggesting the majority of secondary market trading in those digital tokens was also subject to its jurisdiction.

The regulator said any platform providing trading of digital assets that behave like securities and which operate like exchanges must register with the SEC as a national securities exchange, or seek an exemption such as ATS registration.