While enforcement action has been a focus of the SEC in the crypto industry lately, some cryptocurrency exchanges are now making efforts to expand into other areas.
The US Securities and Exchange Commission (SEC) has Take a step back to withdraw from its decision to classify digital assets. The regulator has achieved this by removing the first formal definition of a “digital asset” from the most recent Household Hedging Withdrawal Regulations.
Notably, the SEC first included the definition in its 2022 plan to change mandatory disclosures for hedge funds, but it was removed in the final rule authorized by the commissioners.
While commenting on the matter, Annemarie Kelly, a former SEC official, stated that the SEC’s decision may have been influenced by concerns that it would be difficult to argue in court that digital assets are securities. Despite the agency’s decision, it undoubtedly still has an interest in cryptocurrency-related issues. Remarkably, this has played a significant role in both enforcement action and ongoing rule proposals.
For example, the regulator has announced plans to increase its investigation and enforcement team in the crypto space. According to the SEC, the newly formed employee roles will include prosecuting attorneys, investigators and fraud analysts.
In addition, the securities regulator has emphasized five key focus areas on which it will focus its efforts. This includes cryptocurrency exchanges, DeFi projects, lending and storage services, NFTs, and stablecoins.
The Securities and Exchange Commission stresses enforcement
While the SEC’s approach to regulating cryptocurrencies is complex and evolving, many industry observers believe that the regulator has recently prioritized enforcement action over establishing clear guidelines for cryptocurrencies.
In April, the regulator sued Seattle-based Bittrex, over allegations of violating federal laws. In a press release, the SEC accused Bittrex of collaborating with cryptocurrency issuers to “delete problematic data” in order to evade regulatory scrutiny.
Interestingly, Bittrex received the lawsuit shortly after seeking clarification from the SEC regarding what digital assets on its platform constitute a security.
Similarly, Robinhood Markets received an investigative subpoena from the Securities and Exchange Commission for the company’s crypto operations. According to the details, the subpoena mentions a variety of topics, including cryptocurrency listings, cryptocurrency custody, and platform operations.
While enforcement action has been a focus of the SEC in the crypto industry lately, some cryptocurrency exchanges are now making efforts to expand into other areas.
For example, cryptocurrency exchange Coinbase has created an international exchange to provide an expanded range of crypto services to its busy institutional clients. The new Coinbase International Exchange, according to the business description, provides contracts for Bitcoin (BTC) and Ether (ETH) perpetual futures.
The company promises that the international exchange provides safe customer protection, high-performance trading technology, and a robust risk management framework to protect customers. Overall, the SEC’s strategy for cryptocurrency surveillance is complex, and will likely continue to change as blockchain technology and the industry advance.
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Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about real-world applications of blockchain technology and innovations to drive public acceptance and global integration of the emerging technology. His desires to educate people about cryptocurrencies have inspired his contributions to popular blockchain-based media and websites. Benjamin Godfrey is a fan of sports and farming.
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