SEC Examination Office Publishes Crypto Priorities in 2020

The Securities and Exchange Commission (SEC) will continue with its assessment of digital currency-based securities for U.S. retail investors. 

The Office of Compliance Inspections and Examinations (OCIE) of SEC released its rundown of 2020 examination priorities, featuring digital assets and service providers as areas of concern. While OCIE has recorded these things in past yearly priority lists, Tuesday’s publication offered a peek at how the agency’s way to deal with cryptocurrency has developed since 2018.

While past priority lists only briefly mentioned initial coin offerings and the dangers digital assets may pose to retail investors, this year, OCIE needs to address investment suitability, fund safety, pricing, trading practices, and the effectiveness of compliance programs. The report additionally makes reference to staff members of cryptocurrency exchanges and funds and the “supervision” of their “outside business activities.”

“The digital assets market has grown rapidly and presents various risks, including for retail investors who may not adequately understand the differences between these assets and more traditional products,” OCIE said.

OCIE will likewise look at transfer agents—entities which go about as mediators in securities transactions—that seem to be “developing blockchain technology” or are offering services to digital asset issuers, the document stated.