SEC reminded cryptocurrency exchanges of the need …
SEC reminded cryptocurrency exchanges of the need to enter the legal field
The US Securities and Exchange Commission has issued a warning regarding cryptocurrency exchanges. The SEC draws the attention of investors to the fact that most exchanges are not regulated by anyone, which means they can do whatever they want with their money. If you are an investor, be extremely careful; if you are the owner of the exchange, get ready for reprisals. This is how you can briefly describe the last message of the department.
The SEC reminds that cryptocurrencies and tokens issued through ICOs are securities. Thus, cryptocurrency exchanges actually deal with securities and, accordingly, are required to register with the SEC as national securities exchanges, alternative trading systems, or brokers, which they certainly do not..
At the same time, the SEC believes that investors may form a misconception about cryptocurrency exchanges..
“The SEC staff has doubts that many platforms are presented to investors as registered with the SEC and regulated trading platforms, when they are not,” – the agency writes. “Many platforms refer to themselves as ‘exchanges’, which can give investors the false impression that they are regulated or comply with the regulatory standards of national securities exchanges.”.
Many exchanges establish their own, sometimes quite strict rules for listing cryptocurrencies, but they should not be compared with the rules of stock exchanges, adds the SEC.
Similarly, the SEC applies to instruments on cryptocurrency exchanges. If you place a limit order on such a site, you expect that it will be executed correctly, but again no one is responsible for this. The exchange can give preference to a larger investor or change the contents of the order book without any consequences for itself.
The SEC also reminds exchanges to register at least as alternative trading systems..
Earlier, New York Times journalist Nathaniel Popper noted that the acquisition of the Poloniex exchange by Circle may be the first example of a large cryptocurrency company entering the legal field, suggesting that a similar fate may await other sites that are currently of concern to American regulators..
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