According to a senior SEC official, the Crypto trading market needs some development by utilizing the rules of stock market like surveillance and execution laws.
Even though the Crypto market is still in the process of growth and development, it shows a state of “Wild West”, said Brett Redfearn, who is the head of trading and Market department of SEC.
SEC’s Concerns: Fraud, money laundering, theft, cybersecurity, cyberterrorism are the major concerns of SEC. In the financial technology Conference in New York, Mr. Brett Redfearn elaborated how these are the possible threats to the global financial system.
Previously SEC Chairman Jay Clayton has stated that he believes that ICOs are in need of regulations and supervision.
Concerns about ICOs : About 1,500 Cryptos are in the market right now, and the SEC has been consistent in warning the traders to be extremely careful in making investments in ICOs. “There are no registered exchanges, there are no registered ATSs (Alternative Trading Venues) trading any of these products. That is a very big concern for us”, said Mr Redfearn.
Mr. Redfearn feels that SEC’s enforcement division is extremely busy detecting for the new ICOs. The digital currency market is somewhat similar to the 1990s state of equities market. This was the time when electronic trading networks started rising, with unaligned pricing. However, with rules and regulations, the sector has turned a lot more resourceful.
“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,” said Mr Redfearn.
He believes that even though similar framework cannot be implemented for both the sectors, the principles of best execution, and protection against the illegalities of theft, terrorism and money laundering has to be the similar stance taken by the authorities.