SES increase checks of firms related to crypto industry
2023.02.08 08:33
SES increase checks of firms related to crypto industry
By Tiffany Smith
Budrigannews.com – This year, the United States Securities and Exchange Commission (SEC) will have jurisdiction over cryptocurrency brokers and investment advisors who offer or provide advice regarding cryptocurrencies.
The Securities and Exchange Commission’s (SEC) Division of Examinations released a statement on February 7 outlining its priorities for 2023. It stated that crypto brokers and advisors will need to exercise greater caution when offering, selling, or making recommendations regarding digital assets.
It stated that brokers and advisors who are registered with the SEC will be closely monitored to determine whether they adhered to their “respective standards of care” when providing investment advice, referrals, and recommendations.
The Division of Examinations’ 2023 priorities were made public today. To demonstrate its risk-based approach, the Division publishes its examination priorities annually.
Additionally, the SEC will investigate whether these organizations “routinely” review and update their procedures in order to guarantee that they comply with “compliance, disclosure, and risk management practices.”
This announcement was similar to the SEC’s priorities from 2022; however, it appears that this year the regulator is focusing more on broker standards of care and practices than on the unique risks posed by “emerging financial technologies” that were highlighted in 2022.
The most recent statement comes nearly two weeks after a report stated that the SEC was looking into registered investment advisers who might be providing clients with digital asset custody without the proper credentials.
According to a report from Reuters, the SEC’s investigation has reportedly been ongoing for several months, but the collapse of the crypto exchange FTX has elevated it to the top of the priority list.
The Investment Advisers Act of 1940 stipulates that investment advisory firms must be licensed to provide clients with custody services and adhere to custodial safeguards.
