(Reuters) — The cryptocurrency buying and selling market might be advanced via making use of one of the crucial rules from the inventory marketplace corresponding to very best execution and surveillance, a senior U.S. Securities and Alternate Fee reliable mentioned on Thursday.
Whilst the cryptocurrency marketplace remains to be evolving, it resembles a type of “Wild West,” mentioned Brett Redfearn, who heads SEC’s buying and selling and markets department, and the regulator has quite a few issues it wish to see addressed.
Key a few of the SEC’s issues are fraud, marketplace manipulation, robbery, cybersecurity, terrorist financing and cash laundering, he mentioned at a monetary generation convention in New York held via the Depository Believe & Clearing Company.
SEC Chairman Jay Clayton has mentioned he in most cases considers preliminary coin choices, or ICOs, to be securities choices matter to positive regulatory necessities.
There are some 1,500 cryptocurrencies buying and selling recently, and the SEC has many times warned traders to workout warning when taking into account getting fascinated with new ICOs, particularly as most of the on-line crypto-trading platforms resemble extremely regulated inventory exchanges.
“There aren’t any registered exchanges, there aren’t any registered ATSs (Choice Buying and selling Venues) buying and selling any of those merchandise,” mentioned Redfearn, a former JPMorgan Chase govt. “That may be a very large worry for us,” he mentioned, stressing that whilst the SEC does now not wish to stifle innovation, it has an obligation to give protection to traders.
Redfearn additionally mentioned the SEC’s enforcement department is “very busy” taking a look into the slew of new ICOs.
The cryptocurrency marketplace resembles the equities marketplace within the 1990s when digital buying and selling venues referred to as ECNs (digital buying and selling networks) started shooting up, with costs that weren’t at all times aligned with every different, he mentioned. However laws advanced and the equities marketplace has since grow to be a lot more environment friendly.
“I’m now not certain all the laws would translate over, however there are no doubt rules that exist in that house that we need to then practice in some recognize to what’s going down with crypto-asset buying and selling,” Redfearn mentioned of the equities marketplace.
The ones rules come with defining very best execution, and protective in opposition to fraud, marketplace manipulation and robbery, he mentioned.