According to Cointelegraph reported on January 8, the SEC's Compliance Office includes fintech and digital assets on its annual priority list and will continue to review the crypto space.
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According to an announcement issued by the SEC Office of Compliance Inspections and Examinations (OCIE) on January 7, the agency has included new financial technologies, including digital assets, as a major concern in the next fiscal year.
In the words of the regulator, new technology developments in capital formation and investment advice "are worthy of continuous attention and review."
OCIE issued a similar statement in early 2019. The office stated at the time:
"OCIE will continue to monitor the issuance, sales, trading, and management of digital assets. If the product is a security, it will review whether the product meets regulatory requirements."
As the agency responsible for investigating possible illegal use of securities, OCIE has reason to be vigilant about compliance, but today's announcement could signal a major change.
OCIE's 2020 crypto priorities differ from 2019 in that they appear to be more interested in the positive potential of financial technology. The office wrote that "OCIE will also continue to identify and review companies registered with the SEC in the field of digital assets." This may indicate that its punitive stance on the crypto space will weaken in 2020.
SEC action in 2019
There is no doubt that the SEC has extensively stepped up its involvement in cryptocurrencies, especially the Initial Coin Offering (ICO), which it considers to be an unregistered issue of securities.
In 2019, the SEC took some actions against such ICOs. Some of the more famous cases include the prosecution of instant messaging applications Kik and Telegram and their corresponding KIN and GRAM tokens for sale. At the same time, the SEC also launched block.one Its dApp platform native token EOS has reached a $ 24 million settlement with the company.
In an interview with Cointelegraph last month, SEC Commissioner Hester Peirce expressed interest in promoting more flexible regulatory approaches to crypto products, including identifying products that fall outside the purview of the SEC. She said:
"What the crypto community needs most is a way to convert securities issuances into practical token issuances that will not be covered by securities law."
U.S. government interest in crypto rises
Given the widespread increase in interaction between law enforcement agencies and cryptocurrencies in 2019, this news is not surprising. Just recently, crypto exchange Kraken reported that requests for law enforcement to investigate transactions on the exchange have increased significantly. Similarly, the U.S. tax agency, the Internal Revenue Service, has become increasingly determined to track cryptocurrencies for tax purposes.