The US SEC has issued a new set of regulations for all Securities-Based Swap platforms, which includes many cryptocurrency exchanges.
The United States Securities and Exchange Commission (SEC) has been in the news recently, and today, the market regulator announced the introduction of new rules to prevent fraud on Securities-Based Swap (SBS) entities.
In addition to preventing fraud, the new rules for security-based swap transactions also protect against all forms of manipulation and deception, according to an SEC press release. The Commission also adopted a law prohibiting undue influence over chief compliance officers at certain security-based exchange entities.
With so much responsibility resting on the shoulders of Chief Compliance Officers of SBS entities, the new rules from the market regulator disfavor any attempts to coerce or manipulate these officials into performing their responsibilities per the existing securities laws.
“Any misconduct in the security-based swaps market not only harms direct counter-parties but also can affect reference entities and investors in those reference entities,” said SEC Chair Gary Gensler. “Given the size, scale, and significance of these markets, it is imperative that the Commission protect investors and market integrity by preventing fraud, manipulation, and deception relating to security-based swaps. The set of regulations in effect today will serve this purpose.”
The Crypto Sector; New SEC Rules
The current rules governing SBS trading platforms may also apply to the crypto ecosystem, despite the SEC’s oversight of the United States’ broad financial markets.
This week, the regulator filed lawsuits against the Binance and Coinbase exchanges for facilitating the trading cryptocurrencies categorized as securities. As a result, these and other entities trading these digital assets must take notice of the new provisions.
As many as 67 cryptocurrencies are now classified as securities by the SEC, a classification that affects some of the industry’s most significant coins, including Cardano (ADA), Solana (SOL), Filecoin (FIL), and Polygon (MATIC). Ultimately, the securities classification affects any exchange that facilitates trading activities.
The new regulatory stance of the SEC is destined to unsettle the abundant liquidity these cryptocurrencies currently enjoy. For instance, commission-free brokerage Robinhood is now considering delisting several cryptocurrencies that the SEC has designated as securities. Despite publishing the most recent rules, the crypto market may remain volatile shortly.
