In a move surprising to some, the SEC has announced that a number of cryptocurrency exchanges must register with the agency. Without naming names, the race has begun to determine if a specific platform meets the definitions put forward by the SEC. As our readers are aware, this is actually not surprising at all. In fact, it is only one small step in a broader trend recognizable in the Bitcoin market. How this specific event translates into the current trading conditions is what’s most interesting from a trader’s perspective. And we have indeed seen one specific change which may influence your profits.
In its usually dry tone, the SEC broadcast a matter-of-fact statement, the opening of which reads:
Online trading platforms have become a popular way investors can buy and sell digital assets, including coins and tokens offered and sold in so-called Initial Coin Offerings (“ICOs”). The platforms often claim to give investors the ability to quickly buy and sell digital assets. Many of these platforms bring buyers and sellers together in one place and offer investors access to automated systems that display priced orders, execute trades, and provide transaction data.
A number of these platforms provide a mechanism for trading assets that meet the definition of a “security” under the federal securities laws. 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 federal regulatory framework governing registered national securities exchanges and exempt markets is designed to protect investors and prevent against fraudulent and manipulative trading practices.
The statement seems to have been received rather negatively by Bitcoin enthusiasts but we would want to shield you from excessively emotional reactions. Jumping to rash conclusions is relatively easy when a government agency moves to regulate digital currencies but is this really a sign that the market is going to cave in momentarily? We sure doubt it.
