The SEC believes that cryptocurrency exchanges could improve by implementing similar principles of stock markets.
Cryptocurrency Markets Resemble “Wild West”
Many regulators, experts, analysts believe that cryptocurrency markets still lack proper oversight and regulations. According to a recent report by VentureBeat, senior U.S. Securities and Exchange Commision (SEC), Brett Redfearn, stated that the current state of cryptocurrency markets resemble the “Wild West”. The Securities and Exchange Commission (SEC) is mainly concerned with cryptocurrency market manipulation, cybersecurity, fraud, money laundering and terrorist financing. Redfearn stated in the article:
I’m not sure all of the rules would translate over, but there are certainly principles that exist in that space that we have to then apply in some respect to what’s happening with crypto-asset trading,
But the SEC isn’t just only concerned with cryptocurrencies and cryptocurrency exchanges. The SEC is also keeping a close eye on initial coin offerings (ICOs) and token sales.
SEC Concerned Over ICOs
In the past, the SEC stated multiple times that investors should be very careful when they invest in ICOs and token sales. The US regulatory agency is worried that most ICO tokens may be classified as securities and don’t comply with the regulations that traditional securities do. Redfearn noted:
There are no registered exchanges, there are no registered ATSs (Alternative Trading Venues) trading any of these products
He also added:
I’m not sure all of the rules would translate over, but there are certainly principles that exist in that space that we have to then apply in some respect to what’s happening with crypto-asset trading,
Some cryptocurrency experts believe that the cryptocurrency and ICO market will be better off once regulators create an appropriate regulatory framework. Proper regulations and safety measures could also give institutional investors more confidence and motivation to invest in the cryptocurrency market.
What are your thoughts on SEC’s concerns of unregulated cryptocurrency markets? Do you think that cryptocurrency exchanges should implement the same principles of stock markets? Let us know in the comments below!
Images courtesy of Pixabay, iStockPhoto, Wikimedia Commons
