Monitoring Advisors Shilling Crypto A Top Priority
As it tries to keep up with the changing financial landscape, the US Securities and Exchange Commission will prioritise cryptocurrencies and emerging technologies this year.
The Securities and Exchange Commission (SEC) stated in a statement that it chose focus areas that it believes pose potential risks to investors and the integrity of the American capital markets.
The SEC’s Division of Examinations, which conducts market analysis to identify potential risks, selects and publishes the priorities.
The Division intends to conduct examinations of brokers and investment advisors who use emerging financial technologies, such as cryptocurrency. They will look into whether these middlemen are adhering to expected “standards of care” for investors, as well as whether they are routinely reviewing and updating risk management procedures.
Richard R. Best, director of the Division of Examinations, said that the selected priorities reflect a “changing landscape,” as well as the risks that follow those shifts. By keeping on top of the latest industry trends, he said, the SEC would be better able to identify potential perils for both investors and markets.
Other areas that will be scrutinised this year include environmental, social, and governance (ESG) investing and securities professionals’ cybersecurity.
Last month, Massachusetts Senator Elizabeth Warren urged the SEC to do more to combat cryptocurrency fraud.
While some would prefer the Commodity Futures Trading Commission (CFTC) to lead crypto regulation in the United States, Warren believes SEC rules are the best approach.
The regulator has already increased its oversight of the sector, bringing a record number of crypto-related enforcement actions last year.
(With inputs from Shikha Singh)
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