It’s the turn of cryptocurrency brokers in the series of statements from US Securities and Exchange Commission staff aimed at revealing their current thinking on how to deal with the digital assets space, in this case addressing brokers’ “physical ownership” of assets and separately raising some questions about so-called alternative trading systems (ATS) for cryptocurrencies.
One of the last two releases this week deals with the custody of clients’ crypto securities at regulated brokerages, and advises companies on how to properly own those assets, including protecting clients’ private keys. As long as they follow the informal standards set forth in the statement, stockbrokers won’t take a hit from the SEC.
Your approach should also anticipate “blockchain malfunctions, 51% attacks, hard forks, or airdrops,” according to the SEC’s Division of Trading and Markets statement.
The agency’s advice could help traditional trading companies find greater comfort in handling crypto assets. It would include tokenized stocks and debt securities, although the specific definition of a crypto security has not yet been fully established.
The SEC’s series of crypto statements have been welcomed with open arms by the industry, but they do not have rule-setting or guidance authority, so they would be easy to reverse if the agency’s leadership changed hands.
Also this week, the US securities regulator issued a “frequently asked questions” document that delves into ATS cryptocurrency activity. As Commissioner Hester Peirce, who heads the agency’s cryptocurrency task force, noted, the questions primarily focus on trading and settlement.
“Trading platforms and market participants must be able to operate under the certainty of clear market structure rules that facilitate fair and orderly markets without imposing unnecessary burdens,” Peirce said in a statement.
Read More: US SEC Chief Atkins Says There Will Be Clarity on Cryptocurrencies Tied to Investment Contracts
