The US Securities and Exchange Commission (SEC) has published new statements concerning investors in cryptocurrency. The regulatory body that rejected the latest applications for bitcoin ETFs already considers the cryptocurrency markets to be extremely risky. So what are the statements about?
SEC Statement on Cryptocurrency
A new SEC bulletin says that cryptocurrency exchanges protecting crypto assets face unique risks that are not present in traditional financial services.
“In connection with these services, these organizations and/or their intermediaries can protect the crypto assets of the platform user, as well as store information about the cryptographic key necessary to access the crypto asset. These regulatory obligations include unique risks and uncertainties that are not present in the rules for the protection of non-crypto assets, including technological, legal and regulatory risks and uncertainties.”
The agency states that, given the unique uncertainty surrounding the provision of crypto services, firms should reflect liabilities in their balance sheets to reflect their users’ digital assets held in custody.
Warning for Cryptocurrency Exchanges
In its bulletin, the SEC warns crypto platforms. Related institutions may need to strengthen their balance sheets with respect to potential risks and possible grievances.
“The ability of users of the organization A platform to receive future benefits from crypto assets in digital wallets in which organization A stores information about the cryptographic key depends on the actions of organization A to protect assets. These actions include the protection of crypto assets and related information about cryptographic keys, as well as their protection from loss, theft or other misuse. Technological mechanisms that support how crypto assets are issued, stored or transferred, as well as legal uncertainty regarding the ownership of crypto assets for others, create significantly increased risks for organization A, including an increased risk of financial losses. Accordingly, since organization A is responsible for the protection of crypto assets stored for platform users, including the storage of cryptographic key information necessary to access crypto assets, the staff believes that organization A should undertake to reflect its status in its balance sheet. ” .
For example, Thodex is ideally suited for this topic, Fatih Farouk Ozer stated in his statements that they were attacked more than once, and as a result their losses were covered by the company’s assets. The regulation of cryptocurrency exchanges is important in this regard, we have seen many times how exchanges that do not have the necessary guarantees turn into a time bomb.
The SEC expects crypto platforms to begin disclosing the nature and amount of crypto assets held by their users in company accounts by June 15.
