The U.S. Securities and Exchange Commission issued a statement on Wednesday that said many “online trading platforms” for cryptocurrency need to register with the agency or obtain an exemption. The statement comes in the wake of increased SEC scrutiny of digital currency and initial coin offerings.
In the statement, the SEC acknowledged the popularity of such online trading platforms, and the role they play in digital asset trading. However, the agency expressed concern that the nature of those assets may make this activity subject to the laws governing securities:
“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 SEC also acknowledged that some of those platforms might not technically qualify as exchanges, but even they may need to register with the government:
“Some online trading platforms may not meet the definition of an exchange under the federal securities laws, but directly or indirectly offer trading or other services related to digital assets that are securities. For example, some platforms offer digital wallet services (to hold or store digital assets) or transact in digital assets that are securities.
These and other services offered by platforms may trigger other registration requirements under the federal securities laws, including broker-dealer, transfer agent, or clearing agency registration, among other things. In addition, a platform that offers digital assets that are securities may be participating in the unregistered offer and sale of securities if those securities are not registered or exempt from registration.”
The statement advised companies that develop or employ trading platform technology to consult with an attorney or contact SEC staff to ensure that they properly comply with federal securities law.