The SEC shows some mercy to broker-dealers handling security tokens
In a Christmas present for the crypto industry, broker-dealers who abide by existing rules while holding security tokens in custody will not face enforcement action for the next five years. The U.S. Securities and Exchange Commission is listening.At least, per a Dec. 23 announcement, the SEC is responding to long-term industry complaints that nobody knows who can handle security token trading. The SEC is both requesting comment on the issue and extending a hand to the crypto industry. Perhaps most notably, the commission's announcement will keep broker-dealers safe from enforcement for the....
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Several members of the Congressional Blockchain Caucus are calling for more clarity on broker-dealer rules from the U.S. securities regulator. Nine members of congress have written a letter asking the Securities and Exchange Commission to get its security token guidance straightened out.In a Dec. 9 letter to SEC Chairman Jay Clayton, several members of the Congressional Blockchain Caucus led by Tom Emmer (R-MN) asked the commission to verify rules as to which broker-dealers can custody digital securities. Broker-dealer licensing is required to sell securities in the U.S. The letter also....
The SEC's broker-dealer guidance was generally welcomed as a step in the right direction by industry players.
Overstock is lending a hand to broker-dealers as it inches closer to its blockchain-powered stock issuance. The e-tail giant said yesterday that it is working with stakeholders to boost education of how investors can successfully subscribe to the blockchain stock sale. The company first announced its intention to pursue a sale through this method earlier this year. According to Overstock, prospective buyers of those shares – which would be tied to digitized assets listed on a distributed ledger – have run into headwinds. More specifically, there have reportedly been instances in which....
The Risk Alert seemed to take particular aim at broker-dealers, who have been "inadequate" in their AML compliance. The Security and Exchange Commission's Division of Examinations published on Friday a blueprint for investment managers and institutions on how the division will inspect the handling of crypto assets, or “digital asset securities,” moving forward. The division (formerly the Office of Compliance Inspections and Examinations) is the second-largest wing of the SEC and is tasked with overseeing securities industry players to ensure regulatory compliance. Targeted toward....
While we would be remiss not to laud the SEC’s statement as a step in the right direction, the shortcomings are inescapable. On Dec. 23, 2020, the SEC published a statement proposing a framework for broker-dealers to custody digital asset securities in a manner consistent with Rule 15c3-3 under the Securities Exchange Act of 1934. Among other things, the statement, which will expire after a period of five years from publication, provides that a broker-dealer may custody digital asset securities so long as it operates consistent with the enumerated conditions set forth in the statement,....