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The Problem with Fidelity’s Crypto Trading Platform

October 16, 2018

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Cryptocurrency Exchanges Response to SEC Regulation

In March, the SEC released a statement that warned exchanges from trading assets that meet the definition of a security and such exchanges must register with the SEC as a national securities exchange or be exempt from registration. They also recommended should use a platform that is registered with the SEC.

 

The SEC brings strict standards and also reviews the trading protocols that determine how orders interact and execute. The access to a platform's trading services must be the same for all users to meet the standards of an SEC-registered exchange.

 

In April, former New York Attorney General Eric Schneiderman sent letters to thirteen cryptocurrency exchanges. With regards to Ownership and Control, Basic Operation and Fees, Trading Policies and Procedures, Outages and Other Suspensions of Trading, Internal Controls, and Privacy and Money Laundering. Currently, none of the cryptocurrency exchanges are registered with the SEC.

 

Kraken - said that the exchange will likely register with the US Securities and Exchange Commission (SEC) as a broker dealer, and then later as an Alternative Trading System. Being registered as an ATS requires stricter record keeping and demands more transparency. After being headquartered in New York, Kraken left in 2015 due to the BitLicense regulations.

 

Their CEO Jesse Powell spoke out adamantly against the intrusion: “I don’t think it necessarily helps the business. I think we’re doing everything right anyway.’’ He also said that Kraken would need more clarity from the SEC about which tokens or cryptocurrencies are securities and how to trade them online legally.

 

Coinbase indicated that it is in talks with the SEC about registering as a licensed broker dealer. Coinbase reportedly met with Office of the Comptroller of the Currency (OCC) recently to discuss the possibility of obtaining banking licenses.

 

Poloniex - now owned by Circle Pay, the group has also indicated that it will begin the process of registering acquired with the SEC and FINRA as a broker dealer and later also ATS.

 

Bittrex - “We look forward to continuing our proactive dialogue with the SEC and other regulators on how to build a secure, fully-regulated environment for blockchain that encourages innovation and economic growth.” Official Statement

 

 

By: BGN Editorial Staff

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