The Security and Exchange Commission (SEC) of the United States has released a document today consisting of 8 pages to examine digital assets’ complete framework. SEC has clearly mentioned that in front of the International brokers and transaction platforms, the digital assets will have to go through the same scrutinization process as the traditional assets do. Those companies registered with the Financial Industry Regulatory Authority (FINRA) will have to ensure strictly KYC (know your customer) procedures according to the FINRA Rule 2090.
Regulatory Challenges
As the traditional financial world has started to enter into the race towards the adoption of digital assets, the risks of regulatory challenges have also become greater, therefore to cope up with the situation, the actions for the legitimization of these assets also need to be increased with the same speed. As a result of a lot of activities going in crypto these days, some are satisfied with the regulatory authorities, but others are complaining about the feudal and outdated strategies of the US government to work hand in hand in controlling the elements of blockchain technology.
Considering the situation, the SEC has suspended more than a dozen companies in the last two weeks due to their inappropriate security systems. Many of them have been suspended because of setting certain types of market agendas and discussions on social media to inflate their stocks’ prices. The Security and Exchange Commission is continuously up to identify the trading data of such companies where investors’ public interest and security are taken for granted. Exemplifying recent statement of SEC about the decentralized framework of digital assets where inadequacy in the documentation procedures and controls was observed. A novel issue raised in this notice is the control of investors over their clients’ private keys. The report has no holistic proximity to any of the latest events. However, certain social media discussions about the altcoins like dogecoin have stimulated the Security and Exchange Commission against a decentralized financial industry’s potential threats.
SEC is suspending multiple trading licenses as a result of the issues raising on social media where the authorities have taken these activities as steps to secure investors’ capital.